##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    FORM 20-F
 (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          too

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this
    shell company report  Commission file
    number: 1-14251
  
 SAP AG
 (Exact name of Registrant as
    specified in its charter)
  SAP CORPORATION (Translation of
    Registrants name into English)
  Federal Republic of Germany (Jurisdiction of
    incorporation or organization)
      Dietmar-Hopp-Allee 16
    69190 Walldorf
    Federal Republic of Germany (Address of principal
    executive offices)
  Wendy Boufford
    c/o SAP Labs
    3410 Hillview Avenue, Palo Alto, CA, 94304, United States of
    America
    650-849-4000 (Tel)
    604-974-4789 (Fax) (Name, Telephone,
    Email and/or Facsimile number and Address of Company Contact
    Person)
  Securities registered or to be
    registered pursuant to Section 12(b) of the Act:
  Title of each class

Name of each exchange on which registeredAmerican Depositary Receipts, each representing
    one Ordinary Share, without nominal value

New York Stock ExchangeOrdinary Shares, without nominal value

New York Stock Exchange*  Securities
    registered or to be registered pursuant to Section 12(g) of
    the Act: None
 Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the Act: None
 Indicate
    the number of outstanding shares of each of the issuers
    classes of capital or common stock as of the close of the period
    covered by the annual report:
  Ordinary Shares, without nominal value (as of December 31,
    2008)**

1,225,762,900  Indicate
    by check mark if the registrant is a well-known seasoned issuer,
    as defined in Rule 405 of the Securities Act.
 Yes þ

No o  If
    this report is an annual or transition report, indicate by check
    mark if the registrant is not required to file reports pursuant
    to Section 13 or 15(d) of the Securities Exchange Act of
    1934.
 Yes o

No þ  Note 
    Checking the box above will not relieve any registrant required
    to file reports pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934 from their obligations under
    those Sections.
 Indicate
    by check mark whether the registrant (1) has filed all
    reports required to be filed by Section 13 or 15(d) of the
    Securities Exchange Act of 1934 during the preceding
    12 months (or for such shorter period that the registrant
    was required to file such reports), and (2) has been
    subject to such filing requirements for the past 90 days.
 Yes þ

No o  Indicate
    by check mark whether the registrant is a large accelerated
    filer, an accelerated filer, or a non-accelerated filer. See
    definition of accelerated filer and large accelerated
    filer in
    Rule 12b-2
    of the Exchange Act. (Check one):
 Large
    accelerated
    filer þ     Accelerated
    filer o     Non-accelerated
    filer o
 Indicate
    by check mark which basis of accounting the registrant has used
    to prepare the financial statements included in this filing:
 U.S. GAAP þ     International
    Financial Reporting Standards as issued by the International
    Accounting Standards
    Board o     Other o
 If
    other has been checked in response to the previous
    question, indicate by check mark which financial statement item
    the registrant has elected to follow.
 Item 17 o

Item 18 o  If
    this is an annual report, indicate by check mark whether the
    registrant is a shell company (as defined in
    Rule 12b-2
    of the Exchange Act).
 Yes o

No þ   * Not for trading, but
    only in connection with the registration of American Depositary
    Shares representing such ordinary shares.
  ** Including 38,456,734
    treasury shares.




---



##### Table of Contents





[THIS
    PAGE INTENTIONALLY LEFT BLANK]




---



##### Table of Contents



TABLE OF
    CONTENTS
   PageINTRODUCTION


1FORWARD-LOOKING INFORMATION


2EXPLANATION OF NON-GAAP FINANCIAL
    MEASURES


3PART I.


7ITEM 1. IDENTITY OF DIRECTORS, SENIOR
    MANAGEMENT AND ADVISERS


7ITEM 2. OFFER STATISTICS AND EXPECTED
    TIMETABLE


7ITEM 3. KEY INFORMATION


7Selected Financial Data


7Exchange Rates


8Dividends


9Risk Factors


10ITEM 4. INFORMATION ABOUT SAP


26Description of the Business


26The SAP Portfolio


29Seasonality


40Business by Region


40Revenue by Industry Sector


42Sales, Marketing and Distribution


42Partnerships, Alliances and Acquisitions


43Intellectual Property, Proprietary Rights and
    Licenses


44Organizational Structure


44Description of Property


45ITEM 4A. UNRESOLVED STAFF COMMENTS


46ITEM 5. OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS


46Overview


46Outlook 2008


49Operating Results


52Segment Discussions


61Outlook 2009


64Foreign Currency Exchange Rate Exposure


67Critical Accounting Policies


68Liquidity and Capital Resources


73Off-Balance Sheet Arrangements


76Contractual Obligations


76Research and Development


77ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES


79Supervisory Board


79Executive Board


80Compensation


82Employees


96Share Ownership


98Share-Based Compensation Plans


98 i




---



##### Table of Contents



PageITEM 7. MAJOR SHAREHOLDERS AND RELATED-PARTY
    TRANSACTIONS


101Major Shareholders


101Related-Party Transactions


102ITEM 8. FINANCIAL INFORMATION


102Consolidated Financial Statements


102Other Financial Information


102ITEM 9. THE OFFER AND LISTING


103ITEM 10. ADDITIONAL INFORMATION


106Articles of Incorporation


106Corporate Governance


106Change in Control


110Change in Share Capital


111Rights Accompanying Our Shares


111Taxation


113Material Contracts


120Documents on Display


122ITEM 11. QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK


122Foreign Currency Exchange Rate Risk


122Interest Rate Risk


123Equity Price Risk


124Other Risks


125ITEM 12. DESCRIPTION OF SECURITIES OTHER
    THAN EQUITY SECURITIES


125PART II.


125ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES


125ITEM 14. MATERIAL MODIFICATIONS TO THE
    RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS


125ITEM 15. CONTROLS AND PROCEDURES


125Evaluation of Disclosure Controls and
    Procedures


125Managements Annual Report on Internal
    Control Over Financial Reporting


126Change in Internal Control Over Financial
    Reporting


126Report of the Independent Registered Public
    Accounting Firm


126ITEM 16. [RESERVED]


127ITEM 16A. AUDIT COMMITTEE FINANCIAL
    EXPERT


127ITEM 16B. CODE OF ETHICS


127ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND
    SERVICES


128Audit Fees, Audit-related Fees, Tax Fees and All
    Other Fees


128Audit Committees Pre-approval Policies and
    Procedures


128ITEM 16D. EXEMPTIONS FROM THE LISTING
    STANDARDS FOR AUDIT COMMITTEES


129ITEM 16E. PURCHASES OF EQUITY SECURITIES BY
    THE ISSUER AND AFFILIATED PURCHASERS


129ITEM 16F. CHANGES IN REGISTRANTS
    CERTIFYING ACCOUNTANT


130ITEM 16G. DIFFERENCES IN CORPORATE
    GOVERNANCE PRACTICES


130PART III


133ITEM 17. FINANCIAL STATEMENTS


133ITEM 18. FINANCIAL STATEMENTS


133ITEM 19. EXHIBITS


133Exhibit 8Exhibit 12.1Exhibit 12.2Exhibit 12.3Exhibit 13.1Exhibit 13.2Exhibit 13.3Exhibit 15   ii




---



##### Table of Contents



INTRODUCTION Aktiengesellschaft Form 20-F, Form 20-F
  Form 20-F: Form 20-F
    Form 20-F Form 20-F
    Form 20-F,
 1




---



##### Table of Contents



FORWARD-LOOKING
    INFORMATION Form 20-F Form 20-F
  
    economic conditions in general and trends in our business,
    particularly the current global economic crisis and general
    global economic uncertainty and any further deterioration of
    current conditions;
    claims and lawsuits against us that could result in adverse
    outcomes, including third party infringement claims;
    our ability to use intellectual property, including intellectual
    property licensed to us by third parties;
    the success of our new SAP Enterprise Support offering;
    our ability to obtain, license and enforce intellectual property
    rights;
    our ability to successfully implement our business strategy,
    including our SAP Business ByDesign offering as well as our SAP
    NetWeaver platform strategy;
    our ability to procure new licenses, renew existing maintenance
    agreements and to sell additional professional services,
    particularly with respect to our installed customer base;
    consolidation, competition and rapid technological change in the
    software industry;
    liquidity and the valuation of our financial assets,
    particularly in the current economic climate;
    quarterly fluctuations in our sales and the related difficulty
    of accurately forecasting future revenue, particularly in the
    current economic climate;
    currency fluctuations;
    our ability to establish new relationships and enhance existing
    relationships with third party distributors, software suppliers,
    systems integrators and value-added resellers;
    the effectiveness of our IT security measures and general IT
    system availability and Internet-related privacy concerns;
    our ability to obtain and expand market acceptance of our
    services and products, and customer satisfaction with the
    implementation and installation of our products;
    unauthorized or premature disclosure of our future strategies,
    technologies and products;
    social and political instabilities, terrorist attacks or other
    acts of violence or war;
    our ability to retain key personnel with specialized knowledge
    and technology skills;
    our ability to effectively manage our headcount and our
    geographically dispersed employee base;
    our ability to successfully integrate newly acquired businesses;
    international regulatory and global political conditions;
    our ability to obtain sufficient insurance coverage to avoid
    negative impacts on our financial position or results of
    operations resulting from the settlement of claims; and
    other risks and uncertainties. 2




---



##### Table of Contents



Form 20-F. Form 20-F Form 20-F.
  Form 20-F.
 EXPLANATION OF
    NON-GAAP FINANCIAL MEASURES     
    Our management uses these non-GAAP numbers rather than
    U.S. GAAP numbers as the basis for financial, strategic and
    operating decisions. 3




---



##### Table of Contents




    The variable remuneration components of our board members and
    employees that are tied to our companys growth and
    operating performance are based on SAPs achievement of its
    targets for non-GAAP operating income, non-GAAP software and
    software-related revenue growth at constant currencies, and
    non-GAAP operating margin at constant currencies.
    The annual budgeting process involving all management units is
    based on non-GAAP revenues and non-GAAP operating income numbers
    rather than U.S. GAAP numbers.
    All monthly forecast and performance reviews with all senior
    managers globally are based on these non-GAAP measures rather
    than U.S. GAAP numbers.
    Both company-internal target setting and guidance provided to
    the capital markets are based on non-GAAP revenues and non-GAAP
    income measures rather than U.S. GAAP numbers.    
    The non-GAAP measures provide investors with insight into
    managements decision-making since management uses these
    non-GAAP measures to run our business and make financial,
    strategic and operating decisions.
    The non-GAAP measures provide investors with additional
    information that enables a comparison of year-over-year
    operating performance by eliminating certain direct effects
    resulting from the acquisition of Business Objects.    Non-GAAP Revenue
      Non-GAAP Operating
    Expense
    
    Amortization expense of intangibles acquired in business
    combinations and certain standalone acquisitions of intellectual
    property;
    Expense from purchased in-process research and development; and
    Restructuring expenses as far as incurred in connection with a
    business combinations. 4




---



##### Table of Contents



Non-GAAP Operating
    Income and Non-GAAP Operating Margin
        
    The eliminated amounts may be material to us.
    Without being analyzed in conjunction with the corresponding
    U.S. GAAP measures the non-GAAP measures are not indicative
    of our present and future performance, foremost for the
    following reasons:  
    The additional insight into our potential future financial
    performance that our non-GAAP revenue numbers are intended to
    provide assumes that Business Objects customers renew their
    maintenance contracts. Projections of our future revenues made
    based on these numbers would be overstated if such maintenance
    renewals do not occur.
    While our non-GAAP income numbers reflect the elimination of
    certain acquisition-related expenses, no eliminations are made
    for the additional revenues that result from the acquisitions.
    The acquisition-related one-time charges that we eliminate in
    deriving our non-GAAP income numbers are likely to recur should
    SAP enter into material business combinations in the future.
    The acquisition-related amortization expenses that we eliminate
    in deriving our non-GAAP income numbers are recurring expenses
    that will impact our financial performance in future years.
    While our non-GAAP revenue numbers are adjusted for a one-time
    impact only, our non-GAAP expenses are adjusted for both
    one-time and recurring items. Additionally, the revenue
    adjustment for the fair value accounting for Business Objects
    support contracts and the expense adjustment for one-time and
    recurring acquisition-related charges do not arise from a common
    conceptual basis as the revenue adjustment aims at improving the
    comparability of the initial post-acquisition period with future
    post-acquisition periods while the expense adjustment aims at
    improving the comparability between post-acquisition periods and
    pre-acquisition periods. This should particularly be considered
    when evaluating our non-GAAP operating income and non-GAAP
    operating margin numbers as these combine our non-GAAP revenues
    and non-GAAP expenses despite the absence of a common conceptual
    basis. 5




---



##### Table of Contents



Constant
    Currency Period-Over-Period Changes
     6




---



##### Table of Contents



PART I ITEM 1.
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS  ITEM 2.
    OFFER STATISTICS AND EXPECTED TIMETABLE  ITEM 3. KEY
    INFORMATION SELECTED FINANCIAL
    DATA page F-1 Form 20-F.
  Year Ended December 31,2008


2008


2007


2006


2005


2004US$(1)














In millions, except earnings per share dataIncome Statement
    Data(2):Total revenue


16,097



11,565



10,242



9,393



8,509



7,514Operating income


3,953



2,840



2,732



2,578



2,337



2,018Income from continuing operations


2,682



1,927



1,934



1,881



1,502



1,311Net income


2,600



1,868



1,919



1,871



1,496



1,311Earnings per share based on income from continuing operationsBasic


2.25



1.62



1.60



1.53



1.21



1.05Diluted


2.25



1.62



1.60



1.53



1.21



1.05Earnings per share based on net incomeBasic


2.18



1.57



1.59



1.53



1.21



1.05Diluted


2.18



1.57



1.59



1.52



1.20



1.05Other Data:Weighted-average number of shares outstandingBasic


1,190



1,190



1,207



1,226



1,239



1,243Diluted


1,191



1,191



1,210



1,231



1,243



1,249 7




---



##### Table of Contents



Year Ended December 31,2008


2008


2007


2006


2005


2004US$(1)














In millions, except earnings per share dataBalance Sheet Data:Cash and cash equivalents


1,777



1,277



1,608



2,399



2,064



1,506Total assets


19,761



14,197



10,366



9,503



9,040



7,585Shareholders equity


10,068



7,233



6,503



6,136



5,782



4,594Subscribed
    capital(3)


1,706



1,226



1,246



1,268



316



316Short-term financial
    debt(4)


3,236



2,325



32



31



22



26Long-term financial
    debt(4)


3



2



2



2



9



9     (1)
    
    Amounts presented in US$ have been
    translated for the convenience of the reader at 1.00 to
    US$1.3919, the Noon Buying Rate for converting 1.00 into
    dollars on December 31, 2008. See
     Exchange Rates for recent exchange rates
    between the Euro and the dollar. This convenience translation is
    not included in our financial statements and, accordingly, our
    independent registered public accounting firm has not audited
    these US$ amounts.(2)
    
    All figures are based on
    continuing operations except for Net income. See Note 11 to
    our consolidated financial statements in Item 18.
    Financial Statements for further discussion on our
    discontinued operations. As these discontinued operations were
    acquired by us in 2005 the 2004 income statement data does not
    reflect any discontinued operations.(3)
    
    On December 15, 2006 there
    was a fourfold increase in the number of shares under a capital
    increase pursuant to German law that resulted in an increase to
    subscribed capital of approximately 950 million common
    shares. Furthermore, the 2007 and 2008 figures reflect
    cancellations of 23 million and 21 million treasury
    shares effective September 7, 2007 and September 3,
    2008, respectively. See Item 9. The Offer and
    Listing  General for more detail of the share
    increase and the cancellation of shares.(4)
    
    The balances include financial
    debt representing bank loans, overdrafts and convertible bonds
    issued to facilitate settlement of share-based compensation
    plans (See Item 6. Directors, Senior Management and
    Employees  Share-Based Compensation Plans.).
    Short-term is defined as having a remaining life of one year or
    less; long-term is defined as having a remaining term exceeding
    one year. The significant increase in short-term debt during
    2008 is due to debt incurred to finance the acquisition of
    Business Objects and the related incremental obligations under
    the Business Objects equity programs. EXCHANGE RATES    8




---



##### Table of Contents



Year

Average(1)


High


Low2004


1.2478



1.3625



1.18012005


1.2400



1.3476



1.16672006


1.2661



1.3327



1.18602007


1.3797



1.4862



1.29042008


1.4695



1.6010



1.2446   Month

High


Low2008July


1.5923



1.5559August


1.5569



1.4660September


1.4737



1.3939October


1.4058



1.2446November


1.3039



1.2525December


1.4358



1.26342009January


1.3946



1.2804February


1.3064



1.2547March (through March 9, 2009)


1.2674



1.2549     (1)
    
    The average of the applicable Noon
    Buying Rates on the last day of each month during the relevant
    period.   DIVIDENDS Aufsichtsrat Vorstand
 9




---



##### Table of Contents



Dividend Paidper OrdinaryShareYear Ended December 31,




US$2004


0.28



0.35
(1)2005


0.36



0.43
(1)2006


0.46



0.62
(1)2007


0.50



0.77
(1)2008 (proposed)


0.50
(2)


0.63
(2)(3)     (1)
    
    Translated for the convenience of
    the reader from euro into U.S. dollars at the Noon Buying Rate
    for converting euro into U.S. dollars on the dividend payment
    date. The depositary is required to convert any dividend
    payments received from SAP as promptly as practicable upon
    receipt.(2)
    
    Subject to approval of the Annual
    General Meeting of Shareholders of SAP AG to be held on
    May 19, 2009.(3)
    
    Translated for the convenience of
    the reader from euro into U.S. dollars at the Noon Buying Rate
    for converting euro into U.S. dollars on March 9, 2009 of
    US$1.2565 per 1.00. The depositary is required to convert
    any dividend payments received from SAP as promptly as
    practicable upon receipt. The dividend paid may differ due to
    changes in the exchange rate.   RISK FACTORS Economic, Political
    and Regulatory Risks
  The current global economic crisis and general uncertainty in
    global economic conditions has caused, and may in the future
    cause, a reduction and deferral in demand for our products,
    negatively impacting our business, results of operations,
    financial condition and cash flows. Global economic conditions
    may worsen in the future, exacerbating this negative impact.
   10




---



##### Table of Contents




    Decreased IT investments generally;
    Decreased customer demand for our software and services,
    including order delays and cancellations;
    Customers inability to obtain credit on acceptable terms,
    or at all, to finance purchases of our software and services;
    Insolvency of customers, partners and key suppliers, leading to
    a negative impact on our business;
    Increased risk in collectability of accounts receivable. For
    example, the global economic crisis has led to greater
    write-offs of accounts receivables for SAP in 2008 and may lead
    to greater write-offs in the future;
    Increased reserves for doubtful accounts;
    Increased price competition for our products and services;
    Decreased customer confidence; and
    Pressure on our operating margin.  Form 20-F.
    Continued
    deterioration of global economic conditions could make it
    increasingly difficult for us to accurately forecast demand for
    our products and services, and could cause our revenue and
    operating results to fall short of expectations.
   11




---



##### Table of Contents



Our
    global business activities subject us to economic, regulatory
    and other risks which could harm our business, operating results
    and financial condition.
    
    general economic or political conditions in each country or
    region;
    conflict and overlap among different tax structures;
    potentially adverse tax consequences of doing business in a
    particular region;
    the management of an organization spread over various
    jurisdictions;
    exchange rate fluctuations;
    longer payment cycles;
    regulatory constraints such as import and export restrictions,
    competition law regimes, legislation governing the use of the
    Internet, additional requirements for the development and
    distribution of software and services, trade restrictions,
    changes in tariff and freight rates and travel and communication
    costs;
    In Brazil, India, and China, and elsewhere, certain regulatory
    constraints in the form of, for example, special levies on
    cross-border royalty payments and bureaucratic import-control
    processes impede international goods traffic and business
    operations;
    expenses associated with localizing our products and transacting
    business in the local currency;
    different requirements of workers councils and labor
    unions across countries; and
    higher costs of doing business internationally.    Social
    and political instabilities including those caused by terrorist
    attacks, the risk of war or international hostilities, pandemic
    disease outbreaks and natural disasters could adversely impact
    our business.
   12




---



##### Table of Contents



Market Risks
  Our
    future revenue is dependent in part upon our installed customer
    base continuing to license additional products, renew
    maintenance agreements and purchase additional professional
    services; a decision not to renew contracts or not to purchase
    more of our products or services could adversely impact our
    business.
    Consolidation
    in the software industry may result in unstable and/or decreased
    demand for our software and stronger peer companies in the long
    term.
    Due to
    intense competition, our market share and financial performance
    could decline.
     13




---



##### Table of Contents



Business Strategy
    Risks
  Demand
    for our newly introduced products such as SAP Business ByDesign
    may not develop as planned and our mid-market strategy may not
    be successful.
          Any
    failure to develop new relationships and enhance existing
    relationships with third-party distributors, software suppliers,
    system integrators and value-added resellers that help sell our
    products and services may adversely affect our
    revenues.
     14




---



##### Table of Contents



Human Capital Risks
  If we
    were to lose the services of members of management and employees
    who possess specialized knowledge and technology skills, we may
    not be able to manage our operations effectively or develop new
    products and services.
    If we do
    not effectively manage headcount as well as our geographically
    dispersed employee base, our business may not operate
    efficiently, and this could have an adverse impact on our
    results of operations.
    Organizational and
    Governance-Related Risks
  We are
    subject to significantly increased governance-related regulatory
    requirements both in Germany and the United States.
   15




---



##### Table of Contents



Principal
    shareholders may be able to exert control over our future
    direction and operations.
    Sales of
    ordinary shares by principal shareholders could adversely affect
    the price of our capital stock.
    U.S.
    judgments may be difficult or impossible to enforce against us
    or our Board members.
  non-U.S. resident non-U.S. resident
  SAPs
    Sustainability Strategy may be difficult to maintain, and a
    failure by us to meet customer or partner expectations or
    generally accepted sustainability standards could have an
    adverse impact on our results of operations, our business and
    our reputation.
   16




---



##### Table of Contents



Communication and
    Information Risks
  Our IT
    security measures may be breached or compromised and we may
    sustain unplanned IT system unavailability.
    Wide
    acceptance of the use of Internet-based transactions may be
    hindered due to privacy concerns and privacy breaches.
  e-commerce
  We may
    not be able to prevent unauthorized or premature disclosure of
    our future strategies, technologies and products, resulting in
    competitive disadvantage.
    Financial Risks
  Our
    liquidity and the valuation of our financial assets may continue
    to be adversely impacted by the global economic
    downturn.
   17




---



##### Table of Contents



Because
    we conduct our operations throughout the world, our results of
    operations may be affected by currency fluctuations.
    Our sales
    are subject to quarterly fluctuations and our sales forecast may
    not be accurate.
    
    the relatively long sales cycles for our products;
    the large size and extended timing of individual license
    transactions;
    the timing of the introduction of new products or product
    enhancements by us or our competitors;
    changes in customer budgets;
    seasonality of a customers technology purchases; and
    other general economic and market conditions, such as the global
    economic crisis that emerged in late 2008.     18




---



##### Table of Contents




    expansion of our operations;
    research and development directed towards new products and
    product enhancements; and
    development of new distribution and resale channels,
    particularly for small and midsize enterprises.    The
    market price for our ADRs and ordinary shares may be
    volatile.
    
    the announcement of new products or product enhancements by us
    or our competitors;
    technological innovation by us or our competitors;
    quarterly variations in our results of operations;
    changes in revenue and revenue growth rates on a consolidated
    basis or for specific geographic areas, business units, products
    or product categories;
    speculation in the press or financial community;
    general market conditions specific to particular industries;
    litigation to which we are a party;
    general and country specific economic or political conditions
    (particularly wars, terrorist attacks, etc.); and
    proposed and completed acquisitions or other significant
    transactions by us or our competitors. 19




---



##### Table of Contents



Our
    revenue mix may vary and may negatively affect our profit
    margins.
      Managements
    use of estimates may affect our results of operations and
    financial position.
    Revenue
    recognition accounting pronouncements and other financial
    reporting standards may adversely affect our reported financial
    information.
    The cost
    of derivative instruments for hedging of share-based
    compensation plans may exceed the benefits of those
    arrangements.
   20




---



##### Table of Contents



Project Risks
  Customer
    implementation and installation of our products involves
    significant resources and is subject to significant
    risks.
    
    shortage of our trained consultants available to assist
    customers in the implementation of our products;
    requirements that do not meet customer expectations or the
    software does not fit to the business model of the customer;
    third-party consultants do not have the know-how or resources to
    successfully implement the software;
    the implementation of the software is destabilized by custom
    specific software development; and
    the safeguarding measures offered by SAP are not implemented by
    customers and partners.    Product Risks
  We depend
    on technology licensed to us by third parties, and the loss of
    this technology could delay implementation of our products or
    force us to pay higher license fees.
    Undetected
    errors, shortcomings in our security features or delays in new
    products and product enhancements may result in increased costs
    to us and delayed demand for our products.
   21




---



##### Table of Contents



If we are
    unable to keep up with rapid technological changes, we may not
    be able to compete effectively.
    
    continue to enhance and expand our existing products and
    services;
    provide
    best-in-class
    business solutions and services; and
    develop and introduce new products and provide new services that
    satisfy increasingly sophisticated customer requirements, keep
    pace with technological developments and are accepted in the
    market.   22




---



##### Table of Contents



Our SAP
    NetWeaver platform strategy may not succeed or may make certain
    of our products less desirable.
          Other Operational
    Risks
  We are
    subject to claims and lawsuits against us that may result in
    adverse outcomes.
    Third
    parties may claim we infringe their intellectual property
    rights, which could result in damages being assessed against us
    and our ability to use certain technologies being limited in the
    future.
   23




---



##### Table of Contents



If we
    acquire other companies, we may not be able to integrate their
    operations effectively and, if we enter into strategic
    alliances, we may not work successfully with our alliance
    partners.
    
    inability to successfully integrate the acquired business,
    including integrating different business and licensing models;
    inability to integrate the acquired technologies or products
    with current products and technologies;
    potential disruption of ongoing business;
    inability to retain key technical and managerial personnel of
    the acquired business;
    dilution of existing equity holders caused by capital stock
    issuances to the stockholders of acquired companies;
    assumption of unknown material liabilities of acquired companies;
    incurrence of debt or significant cash expenditures;
    difficulty in implementing, remediating or maintaining controls,
    procedures and policies;
    potential adverse impact on relationships with partners or
    third-party providers of technology or products;
    impairment of relationships with employees and customers;
    integration of the acquired companys accounting, human
    resource and other administrative systems;
    regulatory constraints; and
    problems with product quality, product architecture, legal
    contingencies, product development issues or other significant
    risks that may not be detected through the due diligence process.   24




---



##### Table of Contents



We may
    not be able to adequately obtain, license or enforce
    intellectual property rights.
    We may
    not be able to secure our business operations against disruption
    and to safeguard our assets.
    Our
    insurance coverage may not be sufficient to avoid negative
    impacts on our financial position, results of operations and
    cash flows resulting from the settlement of claims.
    We may
    incur losses in connection with venture capital
    investments.
   25




---



##### Table of Contents



ITEM 4.
    INFORMATION ABOUT SAP (1972-1976) (1976-1988). Aktiengesellschaft is +49-6227-7-47474.
      Form 20-F (www.sap.com) Form 20-F,
 DESCRIPTION OF THE
    BUSINESS Overview
        Evolution of SAP
    Solutions
     26




---



##### Table of Contents



27




---



##### Table of Contents



Mission and Strategy
  Trends
    and Orientation
      Mission
        Strategy
    for Growth
  All-in-One
 28




---



##### Table of Contents




    Organic growth: Our primary growth strategy is to continue to
    develop our own product portfolio and our own base of direct
    customers  by winning more customers and by selling
    more to our existing customers.
    Co-innovation: Collaborating with customers and partners remains
    one of our central policies. We are investing more in our
    partner ecosystem. This supports the development of solutions
    built on the SAP NetWeaver technology platform and leverages
    sales forces to address the various market and customer segments.
    Smart acquisitions: With targeted strategic and
    fill-in acquisitions that add to our broad solution
    offering for individual industries or across industries, we gain
    specific technologies and capabilities to meet the needs of our
    customers. THE SAP PORTFOLIO     
    Efficiency  Innovative business processes to optimize
    operations: SAP connects and streamlines processes across our
    customers businesses to drive efficiency and help enable
    business operations to achieve strategic goals.
    Insight  Improved decisions for greater success: SAP
    enables business people to make more insightful and timely
    strategic decisions based on better information in the context
    of specific business issues. 29




---



##### Table of Contents




    Flexibility  Strategic and operational agility: With
    SAP software, customers can more easily pursue new strategies
    and capture the full benefits of business networks, because
    business processes are flexible and the business platform is
    extensible.      
  *
    
    depending on form of contract  Solutions for Large
    Enterprises
  SAP
    Business Suite
    Core SAP
    Business Suite Applications
      
    The SAP Customer Relationship Management (SAP CRM) application,
    which helps companies acquire and retain customers, build
    lasting relationships, and improve customer loyalty. Companies
    can 30




---



##### Table of Contents



choose between ways to deploy the application: as an on-premise
    implementation, on-demand as Web-based CRM, or in a hybrid
    solution that combines both. As our customers business
    needs evolve, they can smoothly transition from one deployment
    option to another at any time.  
    The SAP Product Lifecycle Management (SAP PLM) application,
    which helps companies manage, track, and control all
    product-related and project-related information over the
    complete product and asset life cycle and across the extended
    supply chain. SAP PLM integrates all product-related information
    needed to collaborate with business partners and supporting
    processes, including product innovation, design and engineering,
    quality and maintenance management, and control of environmental
    issues.
    The SAP Supplier Relationship Management application (SAP SRM),
    which helps organizations in all industries accelerate and
    optimize the supply cycle by improving their vendor
    relationships. It provides strategic value through sustainable
    cost savings, contract compliance, and quick time-to-value.
    The SAP Supply Chain Management (SAP SCM) application, which
    gives our customers a base for building transparent, flexible
    communities of companies. By integrating all partners in the
    supply chain, supply and demand can be synchronized along the
    chain, and materials and knowledge can flow freely among all of
    the partners concerned. That helps companies intelligently adapt
    to changing market conditions and proactively respond to
    shorter, less predictable product life cycles.     31




---



##### Table of Contents



Industry
    Solutions for Large Enterprises
    Process Industries Chemicals
     Mill Products
     Oil & Gas
     MiningDiscrete Industries Aerospace & Defense
     Automotive
     Engineering, Construction & Operations
     High Tech
     Industrial Machinery & ComponentsConsumer Industries Consumer Products
     Retail
     Wholesale Distribution
     Life Sciences

Service Industries Media
     Logistics Service Providers
     Airlines
     Telecommunications
     Utilities
     Professional ServicesFinancial Services Banking
     InsurancePublic Services Healthcare
     Higher Education & Research
     Public Sector
     Defense & Security   Solutions for Small
    Businesses and Midsize Companies
    SAP
    Business
    All-in-One
  All-in-One All-in-One All-in-One All-in-One All-in-One
  SAP
    Business ByDesign
   32




---



##### Table of Contents



ramp-up,
  SAP
    Business One
    SAP BusinessObjects
    Portfolio
    SAP
    BusinessObjects Solutions
  
    SAP BusinessObjects BI solutions help simplify the ways that
    decision makers use information, enabling business users to
    access, format, analyze, navigate in, and share information
    across their organization.
    SAP BusinessObjects information management (IM) solutions
    help organizations improve their data quality, understand and
    use information better, track data lineage for compliance
    purposes, and ensure consistent semantics across the business.
    The SAP BusinessObjects intelligence platform is a BI platform
    with a wide scope that makes relevant BI available to users in
    accordance with their roles. The platform has functions to drive
    productivity and improves organization-wide decision-making
    processes.
    SAP BusinessObjects enterprise performance management (EPM)
    solutions empower organizations to manage all financial and
    operational aspects of strategy, planning, budgeting,
    forecasting, reporting, and analytic requirements.
    SAP BusinessObjects governance, risk, and compliance (GRC)
    solutions help ensure that customers have the proper processes
    and controls in place to realize transparent GRC.  Additional
    Solutions for Business Users
     33




---



##### Table of Contents



Business
    Intelligence Solutions for Midsize Companies
      ad-hoc
  The SAP
    NetWeaver Technology Platform
      Solutions
    for Sustainability
      
    The SAP Supply Chain Management application is designed to help
    our customers achieve their sustainability objectives. Companies
    can use it to consolidate orders and optimize shipments,
    reducing
    CO2
    emissions and overall energy consumption.
    The SAP Environment, Health, and Safety Management (SAP EHS
    Management) application supports the management of environment,
    health, and safety, industrial hygiene, and occupational health
    processes as well as compliance for product safety, hazardous
    substances, dangerous goods, and waste management. In addition,
    SAP EHS Management helps ensure compliance with environmental
    laws and policies as well as reduce associated costs, efforts,
    and risks on plant and corporate levels. Companies can also use
    this software to manage compliance with European law concerning
    the registration, evaluation, authorization, and restriction of
    chemicals (REACH), which helps them secure the right to market
    their products. 34




---



##### Table of Contents




    The SAP Recycling Administration application helps ensure
    compliance with worldwide recycling legislation for packaging,
    batteries, and waste electrical and electronic equipment.
    The SAP BusinessObjects Risk Management application helps
    companies balance business opportunities and the associated
    financial, legal, and operational risks. By specifically
    monitoring high-impact risks to avoid incurring damaging market
    sanctions, companies can maximize corporate performance.    SAP Services
    Portfolio
      Software-Related
    Services
      On-Demand
    Software Services
   35




---



##### Table of Contents



E-Sourcing
  Professional
    Services and Other Services
    e-learning.
    Newly
    Introduced Products and Product Versions
    Expanded
    Offerings for Enterprise Applications and Industry
    Solutions
    
    SAP ERP: In May, we announced the general availability of the
    third enhancement package for the SAP ERP application.
    Functional improvements provide stronger support for financial
    close processes, treasury risk, cash management, and expense
    management. In addition, human capital management capabilities
    were improved to support end-to-end talent management processes.
    For organizations that operate global shared-service
    organizations, new facilities were delivered to support
    intracompany processes and collaboration. Enhancement packages
    enable our customers to add functions to their SAP software
    packages stepwise without upgrades, which reduces the total cost
    of managing their enterprise software implementation.
    SAP Customer Relationship Management: Since the introduction of
    SAP CRM 2007 in December 2007, we have experienced significant
    market momentum on a global basis. In 2008, we further enhanced
    the 36




---



##### Table of Contents



capabilities of SAP CRM by delivering new processes to meet
    industry-specific needs such as investigative case management
    for the public sector, loyalty management for consumer-focused
    industries, and service management for discrete industries. In
    addition, we partnered with Research In Motion (RIM) to extend
    SAP applications for business users by creating an SAP CRM
    application accessed from BlackBerry mobile devices.  
    SAP Supplier Relationship Management: In June 2008, we
    introduced new versions of our SAP
    E-Sourcing,
    SAP Contract Lifecycle Management, and SAP Spend Analytics (now
    SAP BusinessObjects Spend Performance Management) applications.
    These new versions were designed to improve the amount of
    identified and negotiated savings, increasing sustained savings
    to our customers. In November 2008, the first customers started
    to use SAP SRM 7.0. SAP SRM now extends compliance capabilities
    with enhancements to centralized sourcing and contract
    management, services procurement, catalog management, supplier
    enablement, usability, and accessibility to information. SAP SRM
    also helps fully deliver on the complete source-to-pay process
    for our customers.
    SAP Supply Chain Management: In 2008, we released a new version
    of SAP SCM with capabilities that leverage point-of-sales data
    to improve planning accuracy and visibility, provide new
    forecasting methods and enhanced collaboration with contract
    manufacturers, and enable attribute- or characteristics-based
    planning. There were also major enhancements to warehouse and
    transportation management, such as graphical warehouse layout
    modeling, improved visualization, tighter integration of export
    controls, and increased utilization through enhanced integrated
    processes. We have also expanded the radio-frequency
    identification (RFID) and auto-ID solution footprint of SAP SCM
    with support for serialization technology and the EPCIS
    standard, a global communications standard by EPCglobal that
    improves transparency in the tracking of goods.
    SAP Product Lifecycle Management: SAP PLM now offers simplified
    access to information within the context of a specific role to
    help our customers improve productivity, reduce training,
    eliminate manual activities, and make decisions more rapidly.
    SAP PLM now includes an intuitive new user interface that
    delivers information in the context of the role requesting it.
    For example, the application now supports product-centric
    viewing.
    SAP solutions for automatic identification (auto-ID) and
    serialization: With the release of the latest SAP Auto-ID
    Enterprise offering, we delivered several new functions in the
    fields of auto-ID and serialization technology. For example, SAP
    object event repository now conforms to the EPCIS standard.
    Delivery processing scenarios now fully support the
    U.S. Department of Defense item unique identification
    (IUID) schema, which enables the identification of all inventory
    items based on bar codes containing unique, fixed number
    sequences, as well as the electronic product code of EPCglobal
    and other serialization procedures. This release also includes
    significant performance enhancements to support high-volume
    processes. Enhancements to SAP ERP included support for unique
    item identification (UII) from supply chain to asset management.
    In addition, the SAP Event Management 7.0 application enhanced
    usability and flexibility in the Web Dynpro user interface.
    SAP Manufacturing:  By acquiring Visiprise, we
    improved manufacturing operations management capabilities by
    optimizing execution of manufacturing processes on the plant
    floor. This acquisition is a continuation of our investment in
    applications for the shop floor and leverages existing
    capabilities offered by the SAP Manufacturing Integration and
    Intelligence (SAP MII) application. Further enhancements
    included support for outsourced manufacturing, dynamic
    production planning across multiple plants, and advances in lean
    planning and operations management. We also made it easier to
    create composite applications for manufacturing operations that
    can significantly improve employee productivity.
    Enterprise energy management:  In July 2008, we
    delivered an enterprise energy management solution. It comprises
    functions from SAP MII, the plant information solution from
    OSIsoft, and the SAP Environment, Health, and Safety Management
    application. The solution enables companies to 37




---



##### Table of Contents



gather information on the use of energy throughout the
    enterprise, identify areas for energy reduction, monitor the
    implementation of energy excellence projects, and make the
    results available throughout the enterprise. Companies can
    therefore use the enterprise energy management solution to cut
    their energy costs and emissions.  SAP
    NetWeaver Technology Platform Enhanced
    
    SAP NetWeaver Composition Environment: We released the first
    enhancement package for the SAP NetWeaver Composition
    Environment offering, providing a lean, integrated,
    standards-based development, modeling, and runtime environment.
    Software developers and technical consultants can use it to
    extend application logic and, depending on users needs,
    compose new views and applications based on SAP software. The
    enhancement package delivers the next generation of tools for
    increasing process flexibility with new business process
    management and business rules management capabilities.
    SAP NetWeaver Identity Management: The SAP NetWeaver technology
    platform now contains embedded identity management capabilities
    to help companies save time and money by optimizing the
    administration of user accounts and passwords inside their
    business network.
    SAP NetWeaver Master Data Management (SAP NetWeaver MDM):
    Adoption of the SAP NetWeaver MDM component continues to grow
    among companies in all industries and of all sizes. A new
    version was delivered in the fourth quarter of 2008. It offers
    extended flexibility for data modeling and support for complex
    objects, enabling the deployment of a single master data
    management repository for multiple data domains. SAP NetWeaver
    MDM now links with SAP BusinessObjects Data Services software
    through the MDM enrichment controller. It is thus a solution
    with innovative data-integration and data-quality capabilities.
    SAP NetWeaver Information Lifecycle Management: SAP has
    developed a three-pronged approach to information life-cycle
    management that meets the complex IM needs of todays
    organizations: data archiving, which focuses on keeping the
    growth of data volume in check; retention management, which
    deals with the life cycle of data from the time it is created
    until it is destroyed; and a retention warehouse, which
    addresses the decommissioning of legacy applications and systems.
    SAP NetWeaver Enterprise Search: Launched in 2007, the SAP
    NetWeaver Enterprise Search application gives business users
    easy access to data in SAP systems, and intuitive links to find
    related information and act on the data they find. In 2008, we
    again significantly extended the range of information sources
    available and delivered a new user interface for SAP NetWeaver
    Enterprise Search.
    SAP NetWeaver Mobile: In 2008; we introduced a new version of
    the mobile application platform, designed to enhance scalability
    of the platform as well as mobile device management and mobile
    security features.  New
    Developments for Small Businesses and Midsize
    Companies
    
    SAP Business One: In 2008, SAP Business One version 2007 was
    released into general availability. The new release offers many
    new financial and reporting capabilities that are designed to
    enable small 38




---



##### Table of Contents



businesses to leverage local best practices and address local
    business customs. Further, we introduced an industry solutions
    program that allows our software solution partners to create
    tightly integrated solutions that extend the power of SAP
    Business One. Additionally, we enabled integration between SAP
    Business One and SAP NetWeaver, to make it easy for SAP Business
    One customers to connect with SAP Business Suite implementations
    used by their headquarter offices.  
    SAP Business
    All-in-One:
    In the second half of 2008, we released an enhanced version of
    SAP Business
    All-in-One
    with new customer relationship management functions. By
    combining comprehensive, preconfigured SAP CRM and SAP ERP best
    practices, midsize companies can now manage their customers,
    their brands, and sales effectiveness together with core
    business operations in one solution. This new CRM offering can
    be added at any time to a customers SAP Business
    All-in-One
    solution or deployed standalone, and is available from SAP and
    SAP channel partners.
    SAP Business ByDesign: In October 2008, we released Feature Pack
    1.2 for SAP Business ByDesign. This new release optimized
    quality, performance, and system stability.  Broader
    Portfolio for Business Users
    
    SAP BusinessObjects IM solutions: Shipped in March 2008 as part
    of SAP BusinessObjects XI 3.0, our SAP BusinessObjects Data
    Services XI 3.0 information management solution was one of the
    first of its kind to combine data integration and data quality
    in a single product. It offers companies new ways to optimize
    performance, giving users access to the right information at the
    right time in an easy user interface.
    SAP BusinessObjects intelligence platform: In 2008, we delivered
    two releases of the intelligence platform: SAP BusinessObjects
    XI 3.0 in March and SAP BusinessObjects XI 3.1 in September. SAP
    BusinessObjects XI 3.0 makes relevant BI available to users in
    accordance with their roles. The platform now also has new
    functions to drive productivity and improves organization-wide
    decision-making processes. Enhanced migration tools ease
    upgrades for customers. Moreover, SAP BusinessObjects solutions
    now work within practically any application environment: SAP
    BusinessObjects XI 3.1 added broader language support,
    integration with data sources from a variety of
    vendors  including HP, Microsoft, and
    Netezza  and native support for the 64-bit
    architecture many customers now use for their business
    applications.
    SAP BusinessObjects BI solutions: In 2008, we provided the first
    platform to combine access to all information (whether it is
    structured in databases or unstructured text) and access for all
    people (whether they require reporting, query and analysis,
    dashboards and visualization, or predictive analysis) in a
    single environment. We also delivered the SAP BusinessObjects
    Edge BI 3.0 solutions, addressing the BI needs of midsize
    companies, and Crystal Reports Server 2008 software for small
    businesses.
    SAP BusinessObjects GRC solutions: In 2008, we released new
    versions of the SAP BusinessObjects Access Control and SAP
    BusinessObjects Process Control (formerly SAP GRC Process
    Control) applications. SAP BusinessObjects Process Control
    automates control monitoring in both SAP and non-SAP systems to
    assist compliance, detects exceptions, and remedies issues with
    workflow-based processes. The new version of SAP BusinessObjects
    Access Control includes automated review and approval processes
    on employee access throughout the enterprise, automatic
    monitoring and detection of access violations, and reaffirmation
    of mitigation controls. In addition, we have added extended
    identity management integration and cross-platform capabilities
    for non-SAP applications. 39




---



##### Table of Contents




    SAP BusinessObjects EPM solutions: In 2008, we delivered several
    new EPM solutions. The new version of the SAP BusinessObjects
    Planning and Consolidation application helps customers easily
    configure their planning and budgeting applications to run on
    SAP NetWeaver and is also optimized for the Microsoft SQL
    platform, supporting customers with diverse IT environments. A
    new version of our SAP BusinessObjects Strategy Management
    application is now integrated with SAP NetWeaver as well, adding
    more business context to the strategy management process and
    lowering the total cost of ownership for SAP customers. We
    released other new EPM solutions in a new version of the SAP
    BusinessObjects Spend Performance Management application,
    delivering actionable visibility into purchasing detail, a new
    version of the SAP BusinessObjects Financial Consolidation
    application, which helps organizations leverage their BI
    investment and enables users to quickly create and distribute
    ad-hocfinancial reports to key decision makers, and a
    new version of the SAP BusinessObjects Profitability and Cost
    Management application, which helps customers gain more precise
    insight into cost drivers and their effect on profitability.  ramp-up,
   SEASONALITY  BUSINESS BY REGION  40




---



##### Table of Contents



2008


2007


2006 millionsGermany


2,193



2,004



1,907Rest of EMEA


4,011



3,386



2,994Total EMEA


6,204



5,390



4,901United States


2,882



2,706



2,609Rest of Americas


990



871



776Total Americas


3,872



3,577



3,385Japan


515



447



431Rest of APJ


974



828



676Total APJ


1,489



1,275



1,107Total revenue


11,565



10,242



9,393   EMEA.
    Americas.
    APJ.
   41




---



##### Table of Contents



REVENUE BY INDUSTRY
    SECTOR   2008


2007


2006 millionsProcess Industries


2,365



2,135



1,995Discrete Industries


2,432



2,222



2,179Consumer Industries


2,234



1,949



1,665Service Industries


2,703



2,371



2,132Financial Services


773



678



590Public Services


1,058



887



832Total revenue


11,565



10,242



9,393  SALES, MARKETING AND
    DISTRIBUTION   All-in-One
         42




---



##### Table of Contents



PARTNERSHIPS,
    ALLIANCES AND ACQUISITIONS     and/or
    and/or
         43




---



##### Table of Contents



INTELLECTUAL
    PROPERTY, PROPRIETARY RIGHTS AND LICENSES   and/or
     ORGANIZATIONAL
    STRUCTURE     Ownership

Country ofName of Subsidiary

%

Incorporation

FunctionGermanySAP Deutschland AG & Co. KG, Walldorf

100

Germany

Sales, consulting and trainingRest of Europe/Middle East/AfricaSAP (UK) Limited, Feltham

100

Great Britain

Sales, consulting and trainingSAP (Schweiz) AG, Biel

100

Switzerland

Sales, consulting and trainingSAP France S.A., Paris

100

France

Sales, consulting and trainingSAP ITALIA SISTEMI, APPLICAZIONI, PRODOTTI IN DATA PROCESSING
    S.P.A., Milan

100

Italy

Sales, consulting and trainingSAP Nederland B.V.,s-Hertogenbosch

100

The Netherlands

Sales, consulting and trainingSAP CIS, Moscow

100

Russia

Sales, consulting and trainingAmericasSAP America, Inc., Newtown Square

100

USA

Sales, consulting and trainingBusiness Objects Americas

100

USA

Sales, consulting and trainingSAP Canada Inc., Toronto

100

Canada

Sales, consulting, training,
    and research and developmentSAP Public Services, Inc., Washington, D.C.

100

USA

Sales, consulting and trainingSAP Brasil Ltda.

100

Brasil

Sales, consulting and trainingAsia/PacificSAP JAPAN Co., Ltd., Tokyo

100

Japan

Sales, consulting training,
    and research and
    developmentSAP Australia Pty Limited, Sydney

100

Australia

Sales, consulting and training  44




---



##### Table of Contents



DESCRIPTION OF
    PROPERTY         Capital Expenditures
           45




---



##### Table of Contents



ITEM 4A. UNRESOLVED
    STAFF COMMENTS  ITEM 5. OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS OVERVIEW        46




---



##### Table of Contents




    the key factors and trends that we believe impacted our
    performance in 2008;
    our outlook for 2008 compared to our actual performance;
    a discussion of our operating results for 2008 compared to 2007
    and for 2007 compared to 2006 (including Segment Discussions);
    the key factors and trends we believe will impact our
    performance in 2009; and
    our outlook for 2009 (including Medium-Term Perspectives).    KEY FACTORS
  2008 Global Economic
    Trends
           47




---



##### Table of Contents



Year-Over-Year
    Output Growth
  %

2007


2008e


2009pWorld


5.2



3.4



0.5Advanced economies


2.7



1.0



(2.0
)United States


2.0



1.1



(1.6
)Euro area


2.6



1.0



(2.0
)Germany


2.5



1.3



(2.5
)Developing Asia


10.6



7.8



5.5Japan


2.4



(0.3
)


(2.6
)e = Estimate; p = ProjectionSource: IMF, January 2009   IT Market in 2008
       48




---



##### Table of Contents



IT Spending
    Percentage Change Since Previous Year
  %

2007


2008e


2009pWorldTotal IT market


12.5



6.9



0.5Hardware


13.0



4.9



(3.6
)Packaged software


13.8



9.1



3.4Application software


14.4



7.9



2.7Services


11.2



8.0



3.4Americas regionTotal IT market


8.7



3.9



0.6Packaged software


11.2



5.7



3.9Application software


10.0



4.8



3.6Services


6.5



4.8



3.5EMEA regionTotal IT market


16.9



8.4



0.0Packaged software


19.0



11.5



1.9Application software


23.0



10.9



1.0Services


17.2



9.1



2.5APJ regionTotal IT market


12.3



10.3



1.3Packaged Software


11.3



16.2



5.2Application software


11.0



15.0



4.3Services


9.4



13.7



5.4e = Estimate; p = ProjectionSource: IDC Black Book Q4, February 2009  OUTLOOK 2008 SAP Performance
    Against our Outlook for 2008
    Outlook for 2008
   49




---



##### Table of Contents



ramp-up
    
    With recent cost-savings initiatives in place, the Company
    expects full-year 2008 non-GAAP operating margin, which excludes
    a nonrecurring deferred support revenue write-down of
    180 million from the acquisition of Business Objects
    and acquisition-related charges, to be around 28% at constant
    currencies if we can increase non-GAAP software and
    software-related service revenues, excluding a nonrecurring
    deferred support revenue write-down from the acquisition of
    Business Objects, in a range between 20% and 22% at constant
    currencies for the full year 2008. We believe that in the fourth
    quarter of 2008 we can save some 200 million compared
    to our originally forecasted costs. To this end we will stop all
    recruitment, considerably reduce spending on externally provided
    services, and make cuts in travel and other variable expenditure
    for the rest of 2008.  
    We continue to project an effective tax rate of 31.0% to 31.5%
    (based on U.S. GAAP income from continuing operations) for
    2008.
    In our previous outlook (given in July 2008) we expected to
    hire 3,500 employees in 2008 (excluding additions from
    acquisitions). To date we have hired 1,500 new employees (given
    in October 2008; excluding new hires from acquisitions). Based
    on our revised outlook this amount should not significantly
    change through the end of the year.
    We will continue in 2008 with our strategy of buying back shares
    in order to give back liquidity to our shareholders. We already
    bought back shares totaling 486.8 million as of
    September 30, 2008.
    The investments in fixed assets (excluding acquisitions) planned
    for 2008 mainly comprise the completion of office buildings at
    several locations which can be fully financed with operating
    cash flow. Based on our cost saving programs we reduced the
    investments which were planned for the fourth quarter. Our
    financial position shall be further strengthened as a result.
    This outlook is based among others on the presented assumptions
    regarding the global financial crisis which emerged in the
    second half of September. The global financial crisis resulted
    in a 50




---



##### Table of Contents



clear and until this time unexpected change in the buying
    behavior of our customers. However, the outlook is also based on
    the assumption that the buying behavior will follow our normal
    seasonality of revenues; we expect the fourth quarter
    contributing the highest revenues of the year 2008.    Business ObjectsSupport








Currency


Non-GAAPRevenue Not








Effect on the


FinancialU.S. GAAP


Recorded


Acquisition-


Non-GAAP


Non-GAAP


Measure atFinancial


Under U.S.


Related


Financial


Financial


Constant2008

Measure


GAAP


Charges


Measure


Measure


Currency millions, except operating marginSoftware and software-related service revenue


8,457



166







8,623



296



8,919Total
    revenue(1)


11,565



166







11,731



413



12,144Operating
    income(1)


2,840



166



297



3,303



147



3,450Operating margin


24.6%



1.3%



2.3%



28.2%



0.2%



28.4%     (1)
    
    These financial measures are the
    numerator or the denominator in the calculation of our non-GAAP
    operating margin and the comparable U.S. GAAP operating margin,
    and are included in this table for the convenience of the reader.  2008
    Non-GAAP Software and Software-Related Service
    Revenue  Early 2008 Outlook Compared to Actual
    Performance
    2008
    Non-GAAP Operating Margin  Outlook Compared to
    Actual Performance
   51




---



##### Table of Contents



OPERATING RESULTS Total Revenue
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsTotal revenue


11,565



10,242



9,393



13
%


9
%     2008 compared with 2007.
    Date

Period-EndDecember 2007


1.4603March 2008


1.5805June 2008


1.5748September 2008


1.4081December 2008


1.3919     2007 compared with 2006.
    Date

Period-EndDecember 2006


1.3197March 2007


1.3374June 2007


1.3520September 2007


1.4219December 2007


1.4603  52




---



##### Table of Contents



Software and
    software-related service revenue
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsSoftware revenue


3,606



3,407



3,003



6
%


13
%Support revenue


4,593



3,838



3,464



20
%


11
%Subscription and other software-related service revenue


258



182



129



42
%


41
%Software and software-related service revenue


8,457



7,427



6,596



14
%


13
%     2008 compared with 2007.
           53




---



##### Table of Contents



2007 compared with 2006.
            Professional
    services and other service revenue
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsConsulting revenue


2,498



2,221



2,249



12
%


(1
)%Training revenue


434



410



383



6
%


7
%Other service revenue


107



113



96



(5
)%


18
%Professional services and other service revenue


3,039



2,744



2,728



11
%


1
%  54




---



##### Table of Contents



2008 compared with 2007.
    E-Learning on-site
    2007 compared with 2006.
      E-Learning
   55




---



##### Table of Contents



Total Operating
    Expenses and Operating Income
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsTotal operating expenses


8,725



7,510



6,815



16%



10%Operating income


2,840



2,732



2,578



4%



6%Operating margin (Operating income as a percentage of total
    revenue)


24.6%



26.7%



27.4%     2008 compared with 2007.
    
    In 2008 we increased our personnel expenses by
    705 million or 17% to 4,879 million, which
    is the result of the overall headcount increase in 2008 of 7,675
    FTE, including acquisitions, or 17% to 51,536 FTE as of
    December 31, 2008. Of this 17% Business Objects contributed
    14 percentage points or 6,224 FTE.
    In addition to the Business Objects acquisition the 2008 cost of
    software and software-related services increased due to payments
    for additional third-party licenses, the effects of license
    disputes, and further reinforcement of our support resources in
    the first half of the year.
    The increase in our expenses for sales and marketing was steeper
    than the rise in our total revenue. This was principally due to
    our investment in expanding the field organization for our SAP
    BusinessObjects solutions.
    The modest increase in cost of professional services and other
    services, research and development and general and
    administration expense could for the most part be attributed to
    expenses we incurred in several areas in connection with the
    acquisition of Business Objects.    2007 compared with 2006.
   56




---



##### Table of Contents




    In 2007 we increased our personnel expenses by
    356 million or 9% to 4,174 million, which
    is the result of the overall headcount increase in 2007 of 4,663
    FTE or 12% to 43,861 FTE as of December 31, 2007. We
    continued to keep a tight control on personnel expenses due to
    minimal fixed salary increases as well as by adding additional
    headcount primarily in the major emerging markets with modest
    salary levels. In total, 35% of the headcount increase in 2007
    was realized in India, China and Bulgaria. The share of
    employees in these three countries increased from 14% in 2006 to
    16% as of December 31, 2007. Personnel expenses as
    percentage of total operating expenses remained stable at 56%.
    As a result of the strong increase in software and
    software-related service revenue, cost of purchased licenses
    (e.g. databases) increased in 2007 by 27%.
    The incremental headcount and the increase in business activity
    in 2007 resulted in 54 million or 13% higher travel
    expenses compared to 2006.
    Our accelerated investments in connection with SAP Business
    ByDesign.  OPERATING EXPENSES
  Cost of software and
    software-related services
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsCost of software and software-related services


1,646



1,310



1,091



26%



20%As a percentage of software and software-related service revenue


19%



18%



17%     
    Customer support costs which include:  
    SAP Enterprise Support (e.g. End-to-end Solution Operations,
    Global support backbone, 7x 24 Root Cause Analysis (RCA), Custom
    Code Support, Support for Enhancement Packs, Pro-active Remote
    Service)
    Support for Large Enterprises (LE)
    Standard support (e.g. 24x7 customer problem resolution, remote
    service delivery)
    SAP Premium Support (Increased value on standard services)
    Optimized implementation and ongoing management of End-to-end
    Solution Operations (costs and risks control by managing
    customers applications end-to-end)
    SAP MaxAttention Support (comprehensive support tailored to
    customer needs)
    SAP Safeguarding (Reduced implementation or upgrade risk)  
    Costs of developing custom solutions that address
    customers unique business requirements.
    License fees and commissions paid to third parties for databases
    and the other complementary third-party products sublicensed by
    us to customers.  2008 compared with 2007.
 57




---



##### Table of Contents



2007 compared with 2006.
    Cost of professional
    services and other services
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsCost of professional services and other services


2,296



2,091



2,073



10%



1%As a percentage of professional services and other service
    revenue


76%



76%



76%     2008 compared with 2007.
    2007 compared with 2006.
   58




---



##### Table of Contents



Research and
    Development
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsResearch and development


1,631



1,458



1,335



12%



9%As a percentage of total revenue


14%



14%



14%     
    Personnel expenses related to our R&D employees;
    Costs incurred for independent contractors retained by us to
    assist in our R&D activities; and
    Amortization of computer hardware and software used in our
    R&D activities.  2008 compared with 2007.
    2007 compared with 2006.
    Sales and Marketing
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsSales and marketing


2,540



2,162



1,908



17%



13%As a percentage of total revenue


22%



21%



20%   2008 compared with 2007.
  2007 compared with 2006.
 59




---



##### Table of Contents



General and
    Administration
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsGeneral and administration


623



506



464



23%



9%As a percentage of total revenue


5%



5%



5%   2008 compared with 2007.
    2007 compared with 2006.
    Financial
    Income/Expense, Net
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsFinancial income/expense, net


(62
)


124



122



(150
)%


2%As a percentage of total revenue


(1
)%


1%



1%     2008 compared with 2007.
  2007 compared with 2006.
 60




---



##### Table of Contents



Income Taxes
  Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsIncome taxes


825



921



805



(10
)%


14%As a percentage of Income from continuing operations before
    income taxes


30%



32%



30%   2008 compared with 2007.
  2007 compared with 2006.
 SEGMENT DISCUSSIONS       Change

ChangeProduct Segment

2008


2007


2006


2008 vs. 2007

2007 vs. 2006External revenue


8,366



7,369



6,643


14%

11%Segment expenses


(3,655
)


(3,062
)


(2,609
)

19%

17%Segment contribution


4,711



4,307



4,034


9%

7%Segment profitability


56%



58%



61%


(2) percentage points

(3) percentage points   61




---



##### Table of Contents



Change

ChangeConsulting Segment

2008


2007


2006


2008 vs. 2007

2007 vs. 2006External revenue


2,824



2,369



2,300


19%

3%Segment expenses


(2,040
)


(1,738
)


(1,704
)

17%

2%Segment contribution


784



631



596


24%

6%Segment profitability


28%



27%



26%


1 percentage
    point

1 percentage point   Change

ChangeTraining Segment

2008


2007


2006


2008 vs. 2007

2007 vs. 2006External revenue


525



493



440


6%

12%Segment expenses


(300
)


(284
)


(273
)

5%

4%Segment contribution


225



209



167


8%

25%Segment profitability


43%



42%



38%


1 percentage
    point

4 percentage points   Product Segment
    2008 compared with 2007.
      2007 compared with 2006.
 62




---



##### Table of Contents



Consulting Segment
    2008 compared with 2007.
    2007 compared with 2006.
   63




---



##### Table of Contents



Training Segment
  e-learning.
  2008 compared with 2007. e-learning
        2007 compared with 2006. e-learning, e-learning
     OUTLOOK 2009 Future Trends in the
    Global Economy for 2009
       64




---



##### Table of Contents



IT Market: Outlook
    for 2009
     65




---



##### Table of Contents



2009 Financial
    Outlook for SAP
    
    We expect our 2009 non-GAAP operating margin, which excludes a
    nonrecurring deferred support revenue writedown from the
    acquisition of Business Objects of approximately
    9 million and acquisition-related charges, to be in
    the range of 24.5% to 25.5% at constant currencies. That
    includes nonrecurring restructuring costs of between
    200 million and 300 million that we expect
    to incur as we reduce our workforce and that we expect will
    negatively impact our non-GAAP operating margin by approximately
    2 to 3 percentage points. Our 2009 non-GAAP operating
    margin outlook is based on the assumption that our 2009 non-GAAP
    software and software-related service revenue, which excludes a
    nonrecurring deferred support revenue writedown from the
    acquisition of Business Objects, will be unchanged or decline
    not more than 1% at constant currencies (2008:
    8,623 million).
    We expect a corresponding decrease in our operating income. 66




---



##### Table of Contents




    We project an effective tax rate for 2009 of 29.5% to 30.5%
    (2008: 30.1%) based on U.S. GAAP income from continuing
    operations.
    If the Annual General Meeting of Shareholders so resolves, in
    2009 we will again pay a dividend that provides a payout ratio
    of about 32%.      Medium-Term
    Perspectives
       FOREIGN CURRENCY
    EXCHANGE RATE EXPOSURE    67




---



##### Table of Contents



Form 20-F,
 CRITICAL ACCOUNTING
    POLICIES Form 20-F.
  
    Revenue recognition;
    Valuation of accounts receivable;
    Accounting for share-based compensation;
    Accounting for income taxes and uncertain income tax positions;
    Valuation of acquired assets; and
    Legal contingencies.    Revenue Recognition
  97-2, (SOP 97-2),
 68




---



##### Table of Contents



SOP 97-2
      catch-up
  Valuation of
    Accounts Receivable
   69




---



##### Table of Contents



2008


2007


2006 millionsSpecific customer credit loss risks


20



9



3Customer credit loss risks based on aging of the
    receivables  charged to expense/(income)


9



(3
)


(43
)Total amounts charged to expense/(income) for allowances for
    doubtful accounts


29



6



(40
)     Accounting for
    Share-Based Compensation
  Share-Based Payment
   70




---



##### Table of Contents



Accounting for
    Income Taxes and Uncertain Income Tax Positions
     71




---



##### Table of Contents



Valuation of
    acquired assets
          Goodwill and Other Intangible Assets
   72




---



##### Table of Contents



Legal Contingencies
  Accounting for Contingencies
  NEW ACCOUNTING
    STANDARDS NOT YET ADOPTED
   LIQUIDITY AND
    CAPITAL RESOURCES       12-18 months.
   73




---



##### Table of Contents



2008


2007


% change millionsCash and cash equivalents


1,277



1,608



(21
)%Restricted
    cash(1)


3



550



(99
)%Short-term investments


382



598



(36
)%Total


1,662



2,756



(40
)%     (1)
    The restricted cash balance as of December 31, 2007
    represents a security deposit that served as collateral for the
    credit facility entered into in connection with the acquisition
    of Business Objects.         74




---



##### Table of Contents



Analysis of
    Consolidated Statements of Cash Flow
  Years ended December 31,


Change


Change2008


2007


2006


2008 vs. 2007


2007 vs. 2006 millionsNet cash provided by operating activities


2,183



1,950



1,855



12
%


5
%Net cash used in investing activities


(3,769
)


(1,392
)


(132
)


171
%


955
%Net cash provided by/(used in) financing activities


1,281



(1,287
)


(1,375
)


200
%


(6
)%   12-month
  12-month
  Credit Lines
       75




---



##### Table of Contents



Authorized Capital
   OFF-BALANCE SHEET
    ARRANGEMENTS   Consolidation of Variable Interest
    Entities  an interpretation of ARB No. 51.
 CONTRACTUAL
    OBLIGATIONS   Payments due by periodContractual obligations

Total


Less than 1 year


1-3 years


3-5 years


More than 5 years millionsShort-term debt
    obligations(1)


2,404



2,404











Long-term debt
    obligations(1)


2







2







Operating lease
    obligations(2)


863



229



334



153



147Purchase
    obligations(3)


249



189



54



4



2Other long-term liabilities reflected on the balance
    sheet(4)


133







67







66Total


3,651



2,822



457



157



215     (1)
    This represents bank loans and interest thereon.(2)
    See Note 23 to our consolidated financial statements in
    Item 18. Financial Statements for additional
    information about operating lease obligations and the related
    rental expense.(3)
    Purchase obligations represent agreements to purchase goods or
    services that are enforceable and legally binding on us that
    specify all significant terms, including: fixed or minimum
    quantities to be purchased; fixed, minimum or variable price
    provisions; and the approximate timing of the transaction. The
    outstanding obligations include the 76




---



##### Table of Contents



construction of facilities, office
    equipment and car purchase commitments, food and security
    services and other facility commitments.    (4)
    Amounts mainly consist of employee-related liabilities
    (57 million) and derivatives (31 million)
    and deferred rent (36 million). Not included in the
    table are noncurrent income taxes payable of
    278 million, which includes provisions for
    uncertainties in income taxes. Other noncurrent liabilities on
    the balance sheet such as pension and other post employment
    benefit liabilities, deferred compensation, deferred income and
    deferred tax liabilities are not included in this table. For
    additional information on liabilities see Notes 18 and 19b
    to our consolidated financial statements in Item 18
    Financial Statements.    Obligations under
    Indemnifications and Guarantees
       RESEARCH AND
    DEVELOPMENT    77




---



##### Table of Contents



78




---



##### Table of Contents



ITEM 6. DIRECTORS,
    SENIOR MANAGEMENT AND EMPLOYEES SUPERVISORY BOARD   Year

YearFirst

TermName

Age

Principal Occupation

Elected

ExpiresProf. Dr. h.c. mult. Hasso Plattner,
    Chairman(1)(2)(4)(6)(7)(8)(12)


65


Chairman of the Supervisory Board


2003



2012Pekka
    Ala-Pietilä(1)(7)(8)(12)


52


Co-founder and CEO Blyk Ltd.


2002



2012Prof. Dr. Wilhelm
    Haarmann(1)(2)(4)(5)(9)


58


Attorney at Law, Certified Public


1988



2012Auditor and Certified Tax Advisor; HAARMANN
    Partnerschaftsgesellschaft, Rechtsanwälte, Steuerberater,
    WirtschaftsprüferBernard
    Liautaud(7)(13)


46


General Partner, Balderton Capital


2008



2012Dr. h.c. Hartmut
    Mehdorn(1)(5)(6)


66


Chairperson of Executive Board, Deutsche Bahn AG


1998



2012Prof. Dr.-Ing. Dr. h.c. mult.  Dr.-Ing. E.h. mult. Joachim
    Milberg(1)(2)(3)(4)(7)(8)


65


Chairman of the Supervisory Board of BMW AG


2007



2012Dr. Erhard
    Schipporeit(1)(3)(11)(12)


60


Management Consultant


2005



2012Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus
    Wucherer(1)(7)


64


Managing Director of Dr. Klaus Wucherer Innovations- und
    Technologieberatung GmbH


2007



2012Lars Lamadé, Vice
    Chairman(4)(6)(10)


37


Employee, Project Manager Service & Support


2002



2012Thomas
    Bamberger(3)(10)


41


Employee, Chief Controlling Officer


2007



2012Research & Breakthrough Innovation, Head of Operations
    Global Service & SupportPanagiotis
    Bissiritsas(2)(5)(10)


40


Employee, Support Expert


2007



2012Willi
    Burbach(4)(7)(10)


46


Employee, Developer


1993



2012Peter
    Koop(4)(7)(10)


42


Employee, Industry Business Development Expert


2007



2012Christiane
    Kuntz-Mayr(7)(14)


46


Employee, Deputy Chairperson of the Works Council of SAP AG


2009



2012Dr. Gerhard
    Maier(2)(3)(10)


55


Employee, Development Project Manager


1989



2012Stefan
    Schulz(5)(6)(7)(10)


39


Employee, Development Project Manager


2002



2012     (1)
    
    Elected by SAP AGs
    shareholders on May 10, 2007.(2)
    
    Member of the Compensation
    Committee.(3)
    
    Member of the Audit Committee.(4)
    
    Member of the General Committee.(5)
    
    Member of the Finance and
    Investment Committee.(6)
    
    Member of the Mediation Committee. 79




---



##### Table of Contents



(7)
    
    Member of the Technology and
    Strategy Committee.(8)
    
    Member of the Nomination Committee(9)
    
    Until January 1, 2006,
    Wilhelm Haarmann practiced as a partner of Haarmann Hemmelrath
    which served as special German tax counsel to SAP AG and
    counseled SAP with regard to other legal matters. On
    January 1, 2006, he founded HAARMANN
    Partnerschaftsgesellschaft in Frankfurt.  (10)
    
    Elected by SAP AGs employees
    on April 23, 2007.(11)
    
    Member of the Audit Committee and
    determined to be the Audit Committee financial expert.(12)
    
    Member of the Special Committee(13)
    
    Elected by SAP AGs
    shareholders on June 3, 2008, replacing August-Wilhelm
    Scheer who resigned from the Supervisory Board on the same day.(14)
    
    Replacing Helga Classen who left
    the Supervisory Board on December 31, 2008 due to partial
    retirement.      Mitbestimmungsgesetz
 EXECUTIVE BOARD   Year First


Year CurrentName

Appointed


Term ExpiresProf. Dr. Henning Kagermann, Co-CEO


1991



2009Léo Apotheker, Co-CEO


2002



2010Dr. Werner Brandt


2001



2013Erwin Gunst


2008



2012Prof. Dr. Claus Heinrich


1996



2009Bill McDermott


2008



2012Gerhard Oswald


1996



2010John Schwarz


2008



2010Jim Hageman Snabe


2008



2012    80




---



##### Table of Contents




    On February 19, 2008, we announced that Business Objects
    CEO John Schwarz was named member of the SAP Executive Board,
    effective March 1, 2008.
    On April 2, 2008, we announced that the SAP Supervisory
    Board named then Deputy CEO Léo Apotheker as SAPs
    Co-CEO alongside Henning Kagermann, with immediate effect.
    Henning Kagermann will step down as planned on May 31, 2009
    at which time Léo Apotheker will be sole CEO.
    Further on April 2, 2008, we announced that the SAP
    Supervisory Board appointed Erwin Gunst, Bill McDermott and Jim
    Hageman Snabe to the SAP Executive Board effective July 1,
    2008.
    On October 31, 2008, Claus Heinrich announced that he has
    decided to leave SAP on May 31, 2009.
    On November 26, 2008, the SAP Supervisory Board named Erwin
    Gunst the next labor relations director of SAP AG, effective
    January 1, 2009, succeeding Claus Heinrich.
    On December 31, 2008, Peter Zencke gave up this seat on the
    SAP Executive Board upon expiration of his contract.    Henning Kagermann, Co-CEO Vorstandssprecher
  Léo Apotheker, Co-CEO Vorstandssprecher
  Werner Brandt,
  Erwin Gunst
  Claus Heinrich,
  Bill McDermott
  Gerhard Oswald,
  John Schwarz
 81




---



##### Table of Contents



Jim Hagemann Snabe
     COMPENSATION    Compensation for
    Executive Board Members
  Compensation
    System
            
    The fixed element is paid as a monthly salary.
    The amount of performance-related compensation to be paid out in
    respect of 2008 depends on the SAP Groups achievement of
    its targets for (non-GAAP) operating income, (non-GAAP) software
    and 82




---



##### Table of Contents



software-related service revenue growth at constant currencies,
    and the (non-GAAP) operating margin at constant currencies.  
    On February 11, 2009, the Supervisory Boards
    Compensation Committee assessed SAPs performance against
    the agreed targets and determined how much performance-related
    compensation was payable. The payment will be made after the
    Annual General Meeting of Shareholders in May 2009.
    The regular form of share-based compensation is the issue of
    virtual stock options under the terms of the 2007 stock option
    plan (SAP SOP 2007). For the terms and details of SAP
    SOP 2007, see Note 27 to our consolidated financial
    statements in ITEM 18. Financial Statements.  Amount of
    Compensation
    Performance Related


Long-TermFixed Elements


Element


Incentive ElementsDirectors


Share-BasedProfit-


CompensationSalary


Other(1)


Sharing


(SAP SOP
    2007)(2)


Total(000)Prof. Dr. Henning Kagermann (Co-CEO)


750.0



15.7



2,606.1



948.4



4,320.2Léo Apotheker (Co-CEO)


687.5



334.5



2,388.9



632.3



4,043.2Dr. Werner Brandt


455.0



23.5



1,581.0



577.3



2,636.8Erwin
    Gunst(3)


227.5



18.1



790.5







1,036.1Prof. Dr. Claus E. Heinrich


455.0



19.8



1,581.0



577.3



2,633.1Bill
    McDermott(3)


395.2



142.4



631.3







1,168.9Gerhard Oswald


455.0



627.9



1,581.0



577.3



3,241.2John
    Schwarz(4)


424.9



14.3



1,295.2



577.3



2,311.7Jim Hagemann
    Snabe(3)


227.5



22.3



790.5







1,040.3Dr. Peter Zencke


455.0



143.5



1,581.0



577.3



2,756.8Total


4,532.6



1,362.0



14,826.5



4,467.2



25,188.3     1)
    
    Insurance contributions, benefits
    in kind, expenses for maintenance of two households due to work
    abroad, compensation from seats on other governing bodies in the
    SAP Group, leave compensation, reimbursement of legal fees.2)
    
    Fair value at the time of
    allocation.3)
    
    Member of the Executive Board
    since July 1, 2008. (The table shows compensation since
    that date.)4)
    
    Member of the Executive Board
    since March 1, 2008. (The table shows compensation since
    that date.)     83




---



##### Table of Contents



PerformanceRelated


Long-TermFixed Elements


Element


Incentive ElementsDirectors


Share-BasedProfit-


CompensationSalary


Other1)


Sharing


(SAP SOP
    2007)(2)


Total(000)Prof. Dr. Henning Kagermann (Co-CEO)


728.5



16.0



4,219.7



949.1



5,913.3Shai Agassi (member until March 31,
    2007)(4)


161.3



3.1



446.8(3
)






611.2Léo Apotheker (Co-CEO)


485.6



59.0



2,813.1



632.7



3,990.4Dr. Werner Brandt


443.4



41.3



2,568.5



577.7



3,630.9Prof. Dr. Claus E. Heinrich


443.4



20.2



2,568.5



577.7



3,609.8Gerhard Oswald


443.4



14.8



2,568.5



577.7



3,604.4Dr. Peter Zencke


443.4



28.0



2,568.5



577.7



3,617.6Total


3,149.0



182.4



17,753.6



3,892.6



24,977.6     1)
    
    Insurance contributions, benefits
    in kind, expenses for maintenance of two households due to work
    abroad, compensation from seats on other governing bodies in the
    SAP Group.2)
    
    Fair value at the time of
    allocation.3)
    
    The portion of the directors
    profit-sharing for January through March 2007 was calculated on
    the basis of the actual directors profit-sharing paid in
    2006.4)
    
    Shai Agassi left the Executive
    Board on March 31, 2007. His employment contract with SAP
    ended on April 30, 2007.    2008 AllocationsTotal FairValue ofLong-TermFair Value


Incentive


Fair Valueper Right


Elements


per Right on


Total Value onat Time of


at Time of


December 31,


December 31,Quantity


Grant


Grant


2008


2008


(000)





(000)Prof. Dr. Henning Kagermann (Co-CEO)


133,396



7.11



948.4



4.67



623.0Léo Apotheker (Co-CEO)


88,933



7.11



632.3



4.67



415.3Dr. Werner Brandt


81,200



7.11



577.3



4.67



379.2Erwin
    Gunst(1)


















Prof. Dr. Claus E. Heinrich


81,200



7.11



577.3



4.67



379.2Bill
    McDermott(1)


















Gerhard Oswald


81,200



7.11



577.3



4.67



379.2John
    Schwarz(2)


81,200



7.11



577.3



4.67



379.2Jim Hagemann
    Snabe(1)


















Dr. Peter Zencke


81,200



7.11



577.3



4.67



379.2Total


628,329







4,467.2







2,934.3     1)
    
    Member of the Executive Board
    since July 1, 2008. (No allocations were made after that
    date.)2)
    
    Member of the Executive Board
    since March 1, 2008. (The table shows allocations since
    that date.) 84




---



##### Table of Contents



2007 AllocationsTotal FairValue ofLong-TermFair Value


Incentive


Fair Valueper Right


Elements


per Right on


Total Value onat Time of


at Time of


December 31,


December 31,Quantity


Grant


Grant


2007


2007


(000)





(000)Prof. Dr. Henning Kagermann (Co-CEO)


118,637



8.00



949.1



8.53



1,012.0Léo Apotheker (Co-CEO)


79,093



8.00



632.7



8.53



674.7Dr. Werner Brandt


72,216



8.00



577.7



8.53



616.0Prof. Dr. Claus E. Heinrich


72,216



8.00



577.7



8.53



616.0Gerhard Oswald


72,216



8.00



577.7



8.53



616.0Dr. Peter Zencke


72,216



8.00



577.7



8.53



616.0Total


486,594







3,892.6







4,150.7   End-of-Service
    Undertakings
  Retirement
    Pension Plan
           85




---



##### Table of Contents



In Fiscal Year 2008(000)Bill McDermott


474.5Jim Hagemann Snabe


92.1       Prof. Dr.Henning


Léo











Prof. Dr.Kagermann


Apotheker





Dr. Werner





Claus E.


Bill


Gerhard


Dr. Peter(Co-CEO)


(Co-CEO)


Shai Agassi


Brandt


Erwin
    Gunst(1)


Heinrich


McDermott


Oswald


Zencke


Total(000)PBO January 1, 2007


5,334.7



445.4



356.8



593.3







3,015.3







3,284.3



3,875.9



16,905.7Less plan assets market value January 1, 2007


4,582.5



603.4



246.4



408.2







1,763.4







2,015.1



2,947.0



12,566.0Accrued January 1, 2007


752.2



(158.0
)


110.4



185.1







1,251.9







1,269.2



928.9



4,339.7PBO change in 2007


530.5



(22.9
)


(320.9
)


20.4







(284.4
)






(269.5
)


(228.4
)


(575.2
)Plan assets change in 2007


645.5



27.0



(199.0
)


102.5







265.3







301.3



407.9



1,550.5PBO December 31, 2007


5,865.2



422.5



35.9



613.7



280.3



2,730.9



588.4



3,014.8



3,647.5



17,199.2Less plan assets market value December 31, 2007


5,228.0



630.4



47.4



510.7



272.9



2,028.7



45.0



2,316.4



3,354.9



14,434.4Accrued December 31, 2007


637.2



(207.9
)


(11.5
)


103.0



7.4



702.2



543.4



698.4



292.6



2,764.8PBO change in 2008


(277.2
)


17.3







88.1



108.9



81.0



366.6



84.3



(36.8
)


432.2Plan assets change in 2008


277.2



28.4







113.3



(224.8
)


282.6



(11.7
)


320.2



431.8



1,217.0PBO December 31, 2008


5,588.0



439.8







701.8



389.2



2,811.9



955.0



3,099.1



3,610.7



17,595.5Less plan assets market value December 31, 2008


5,505.2



658.8







624.0



48.1



2,311.3



33.3



2,636.6



3,786.7



15,604.0Accrued December 31, 2008


82.8



(219.0
)






77.8



341.1



500.6



921.7



462.5



(176.0
)


1,991.5     1)
    
    When Erwin Gunst joined the
    Executive Board and his employment with SAPs Switzerland
    affiliate ended, his vested plan funds were transferred to a
    vested benefits account.    Vested on


Vested on


Vested onDecember 31,


December 31,


December 31,2008


2007


2006(000)Prof. Dr. Henning Kagermann (Co-CEO)


334.9
(1)


322.7
(1)


289.8Léo Apotheker (Co-CEO)


45.5



45.5



45.5Dr. Werner Brandt


48.0



41.0



34.4Erwin Gunst


32.8







Prof. Dr. Claus E. Heinrich


186.1



175.2



165.5Bill McDermott


121.8







Gerhard Oswald


201.2



192.8



184.6Dr. Peter Zencke


226.5



216.9



207.2     (1)
    
    Due to the extension of Henning
    Kagermanns contract beyond his 60th birthday, this value
    represents the retirement pension entitlement that he would
    receive after his current Executive Board contract expires on
    May 31, 2009, based on the entitlements vested on
    December 31, 2008. 86




---



##### Table of Contents



Postcontractual
    Noncompete Provisions
  12-month
  End of
    Term in Office and of Employment Contract
  12-month
  Early
    Termination
        LONG-TERM
    INCENTIVES FOR THE EXECUTIVE BOARD
    SAP
    SOP 2007
   87




---



##### Table of Contents



SAP
    SOP 2007 Stock Options
  Holding onDecember 31,





Fair Value2008


Fair Value


per Unit on


Accrual onYear


Quantity of


per Unit at


December 31,


December 31,Granted


Options


Time of Grant


2008


2008





(000)Prof. Dr. Henning Kagermann (Co-CEO)


2007



118,637



8.00



3.50



363.32008



133,396



7.11



4.67



259.6Léo Apotheker (Co-CEO)


2007



79,093



8.00



3.50



242.22008



88,933



7.11



4.67



173.0Dr. Werner Brandt


2007



72,216



8.00



3.50



221.22008



81,200



7.11



4.67



158.0Erwin
    Gunst(1)


2007



56,258



8.00



3.50



172.32008



70,284



7.11



4.67



136.8Prof. Dr. Claus E. Heinrich


2007



72,216



8.00



3.50



221.22008



81,200



7.11



4.67



158.0Bill
    McDermott(1)


2007



62,508



8.00



3.50



191.42008



70,284



7.11



4.67



136.8Gerhard Oswald


2007



72,216



8.00



3.50



221.22008



81,200



7.11



4.67



158.0John
    Schwarz(2)


2007















2008



81,200



7.11



4.67



158.0Jim Hagemann
    Snabe(1)


2007



37,505



8.00



3.50



114.92008



56,228



7.11



4.67



109.4Dr. Peter Zencke


2007



72,216



8.00



3.50



221.22008



81,200



7.11



4.67



158.0Total






1,467,990











3,574.5     (1)
    
    Member since July 1, 2008;
    the holding was allocated before appointment to the Executive
    Board(2)
    
    Member since March 1, 2008  Incentive Plan
    2010
   88




---



##### Table of Contents



tm
  
    If market capitalization does not increase by 50% or more, the
    Executive Board will not receive a payout.
    If market capitalization increases by more than 50% but less
    than 100%, target achievement will be measured progressively.
    If SAPs market capitalization increases not less than
    twofold during the said period, the Executive Board will receive
    a payout of 100 million.      OriginalQuantity





Fair Value perGranted


Fair Value per


Unit on


Accrual onNumber of


Unit at Time of


December 31,


December 31,Rights


Grant


2008


2008





(000)Prof. Dr. Henning Kagermann (Co-CEO)


188,182



24.87



3.09



340.2Léo Apotheker (Co-CEO)


125,455



24.87



3.09



226.8Dr. Werner Brandt


62,727



24.87



3.09



113.4Erwin
    Gunst(1)


28,815



14.02



3.09



52.1Prof. Dr. Claus E. Heinrich


62,727



24.87



3.09



113.4Bill
    McDermott(1)


45,345



14.02



3.09



82.0Gerhard Oswald


62,727



24.87



3.09



113.4Jim Hagemann
    Snabe(1)


17,290



14.02



3.09



31.3Dr. Peter Zencke


62,727



24.87



3.09



113.4Total


655,995











1,186.0     (1)
    
    Member since July 1, 2008;
    the rights were allocated before appointment to the Executive
    Board 89




---



##### Table of Contents



SAP
    SOP 2002
    one-to-three
    SAP
    SOP 2002 Stock Options
  RightsHolding on


ExercisedJanuary 1, 2008


in 2008





Holding on December 31, 2008Remaining





Price on





RemainingYear


Strike Price


Quantity


Term in


Quantity of


Exercise


Quantity of


Term inGranted


per Share


of Shares


Years


Shares


Day


Shares


Years











Prof. Dr. Henning Kagermann (Co-CEO)


2004



37.50



200,000



1.13











200,000



0.132005



33.55



267,820



2.11











267,820



1.112006



46.48



143,404



3.10











143,404



2.10Léo Apotheker (Co-CEO)


2004



37.50



112,000



1.13











112,000



0.132005



33.55



149,980



2.11











149,980



1.112006



46.48



95,604



3.10











95,604



2.10Dr. Werner Brandt


2004



37.50



112,000



1.13











112,000



0.132005



33.55



149,980



2.11











149,980



1.112006



46.48



87,292



3.10











87,292



2.10Erwin
    Gunst(1)


2005



33.55



61,264



2.11











61,264



1.112006



46.48



44,596



3.10











44,596



2.10Prof. Dr. Claus E. Heinrich


2004



37.50



112,000



1.13











112,000



0.132005



33.55



149,980



2.11











149,980



1.112006



46.48



87,292



3.10











87,292



2.10Bill
    McDermott(1)


2006



46.48



77,296



3.10











77,296



2.10Gerhard Oswald


2005



33.55



149,980



2.11











149,980



1.112006



46.48



87,292



3.10











87,292



2.10Jim Hagemann
    Snabe(1)


2005



33.55



51,180



2.11











51,180



1.112006



46.48



37,164



3.10











37,164



2.10Dr. Peter Zencke


2004



37.50



112,000



1.13











112,000



0.132005



33.55



149,980



2.11











149,980



1.112006



46.48



87,292



3.10











87,292



2.10Total










2,525,396















2,525,396     (1)
    
    Member since July 1, 2008;
    the shares were allocated before appointment to the Executive
    Board  LTI Plan 2000
   90




---



##### Table of Contents



one-to-three
    RightsHolding on


Exercised in





Holding on December 31,January 1, 2008


2008





2008Remaining





Price on





RemainingYear


Strike Price


Quantity


Term in


Quantity of


Exercise


Quantity of


TermGranted


per Share


of Shares


Years


Shares


Day2


Shares


in Years











Prof. Dr. Henning Kagermann (Co-CEO)


2000







112,128



2.14











112,128



1.142001







157,500



3.14











157,500



2.14Léo Apotheker (Co-CEO)


2002







87,500



4.14











87,500



3.14Dr. Peter Zencke


2000







27,924



2.14











27,924



1.142001







73,700



3.14











73,700



2.14Total










458,752















458,752     (1)
    
    No options were exercised in 2008,
    and the strike price is variable in accordance with the terms of
    the plan  being ascertained on the day an option is
    exercised  so there is no information to disclose
    here.(2)
    
    No options were exercised in 2009,
    so no strike price is shown. 91




---



##### Table of Contents



one-to-three
    Rights





Holding onHolding on


Exercised in





December 31,January 1, 2008


2008





2008Remaining





Price on





RemainingYear


Strike Price


Quantity


Term


Quantity of


Exercise


Quantity


TermGranted


per Share


of Shares


in Years


Shares


Day


of Shares


in Years











Prof. Dr. Henning Kagermann (Co-CEO)


2000



72.58



89,700



2.14











89,700



1.142001



47.81



126,000



3.14











126,000



2.142002



37.88



360,000



4.14











360,000



3.14Léo Apotheker (Co-CEO)


2000



83.67



95,400



2.19











95,400



1.192001



47.81



120,000



3.14











120,000



2.142002



37.88



70,000



4.14











70,000



3.14Dr. Werner Brandt


2001



47.81



20,000



3.14











20,000



2.142002



37.88



120,000



4.14











120,000



3.14Prof. Dr. Claus E. Heinrich


2000



72.58



65,700



2.14











65,700



1.142001



47.81



88,000



3.14











88,000



2.142002



37.88



200,000



4.14











200,000



3.14Gerhard Oswald


2000



72.58



65,700



2.14











65,700



1.142001



47.81



88,000



3.14











88,000



2.14Dr. Peter Zencke


2000



72.58



65,700



2.14











65,700



1.142001



47.81



88,000



3.14











88,000



2.142002



37.88



200,000



4.14











200,000



3.14Total










1,862,200















1,862,200  92




---



##### Table of Contents



Total
    Expense for Share-Based Compensation
    2008


2007(000)Prof. Dr. Henning Kagermann (Co-CEO)


55.9



1,047.5Léo Apotheker (Co-CEO)


37.3



690.3Dr. Werner Brandt


98.9



601.4Erwin
    Gunst(1)


108.0



Prof. Dr. Claus E. Heinrich


98.9



518.7Bill
    McDermott(1)


97.4



Gerhard Oswald


98.9



601.4John
    Schwarz(2)


158.1



Jim Hagemann
    Snabe(1)


95.2



Dr. Peter Zencke


98.9



601.4Total


947.5



4,060.7     (1)
    
    Member of the Executive Board
    since July 1, 2008.(2)
    
    Member of the Executive Board
    since March 1, 2008.  STOCK HELD BY
    EXECUTIVE BOARD MEMBERS
      Transactions in SAP SharesTransaction Date

Transaction

Quantity

Unit Price Léo Apotheker (Co-CEO)


October 29, 2008



Stock purchase



2,000



26.35   Executive
    Board: Other Information
     93




---



##### Table of Contents



Compensation for
    Supervisory Board members
  Compensation
    System
         94




---



##### Table of Contents



Amount of
    Compensation
    2008


2007Compensation











CompensationFixed


Variable


for Committee





Fixed


Variable


for CommitteeCompensation


Compensation


Work


Total


Compensation


Compensation


Work


Total(000)Prof. Dr. h.c. mult. Hasso Plattner (chairperson)


75.0



125.0



25.0



225.0



75.0



125.0



15.0



215.0Lars Lamadé (deputy chairperson from May 10, 2007)


50.0



100.0



2.5



152.5



49.0



80.2



2.5



131.7Pekka Ala-Pietilä


37.5



62.5



7.5



107.5



37.5



62.5



2.5



102.5Thomas Bamberger (from May 10, 2007)


37.5



62.5



2.5



102.5



25.0



41.7



1.7



68.3Panagiotis Bissiritsas (from May 10, 2007)


37.5



62.5



5.0



105.0



25.0



41.7



3.3



70.0Willi Burbach


37.5



62.5



5.0



105.0



37.5



62.5



4.2



104.2Helga Classen (deputy chairperson until May 10, 2007)


37.5



62.5



2.5



102.5



45.8



75.0



2.5



123.3Prof. Dr. Wilhelm Haarmann


37.5



62.5



9.0



109.0



37.5



62.5



7.5



107.5Bernhard Koller (until May 10, 2007)


0.0



0.0



0.0



0.0



15.6



26.0



1.0



42.7Peter Koop (from May 10, 2007)


37.5



62.5



2.5



102.5



25.0



41.7



1.6



68.3Christiane Kuntz-Mayr (until May 10, 2007)


0.0



0.0



0.0



0.0



15.6



26.0



2.1



43.8Bernard Liautaud (from June 3, 2008)


21.9



36.5



1.5



59.8



0.0



0.0



0.0



0.0Dr. Gerhard Maier


37.5



62.5



5.0



105.0



37.5



62.5



5.0



105.0Dr. h.c. Hartmut Mehdorn


37.5



62.5



1.5



101.5



37.5



62.5



0.0



100.0Prof. Dr.-Ing. Dr. h.c. Dr.-Ing. E.h. Joachim Milberg (from
    May 10, 2007)


37.5



62.5



11.5



111.5



25.0



41.7



5.0



71.7Prof. Dr. Dr. h.c. August-Wilhelm Scheer (until
    April 4, 2008)


12.5



20.8



2.5



35.8



37.5



62.5



7.5



107.5Dr. Barbara Schennerlein (until May 10, 2007)


0.0



0.0



0.0



0.0



15.6



26.0



1.0



42.7Dr. Erhard Schipporeit


37.5



62.5



7.5



107.5



37.5



62.5



5.0



105.0Stefan Schulz


37.5



62.5



5.0



105.0



37.5



62.5



5.0



105.0Dr. Dieter Spöri (until May 10, 2007)


0.0



0.0



0.0



0.0



15.6



26.0



1.0



42.7Dr. h.c. Klaus Tschira (until May 10, 2007)


0.0



0.0



0.0



0.0



15.6



26.0



1.0



42.7Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer (from May 10,
    2007)


37.5



62.5



2.5



102.5



25.0



41.7



1.7



68.3Total


646.9



1,094.8



98.3



1,840.0



672.9



1,118.8



76.3



1,867.9      95




---



##### Table of Contents



Long-Term
    Incentives for the Supervisory Board
    Supervisory
    Board Members Shareholdings
      Transactions in SAP SharesTransaction Date

Transaction

Quantity


Unit Price in Dr. Elisabeth Strobl-Haarmann


March 13, 2008



Stock sale



4,490



31.50Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer


July 4, 2008



Stock purchase



1,500



33.08   Supervisory
    Board: Other Information
       EMPLOYEES
    (continuing operations)    96




---



##### Table of Contents



Employees as of December 31, continuing operations2008


2007


2006FTEs

EMEA


Americas


APJ


Total


EMEA


Americas


APJ


Total


EMEA


Americas


APJ


TotalProduct


3,266



1,301



1,891



6,458



3,022



1,002



1,807



5,831



2,840



808



1,595



5,243Service


7,326



4,142



2,583



14,051



6,558



3,893



2,334



12,785



6,336



3,363



1,819



11,518Development


8,687



2,767



4,093



15,547



7,787



1,749



3,415



12,951



7,507



1,530



2,764



11,801Sales & Marketing


4,645



4,014



2,042



10,701



3,688



3,129



1,465



8,282



3,330



2,604



1,116



7,050General & Administration


1,996



788



460



3,244



1,810



571



416



2,797



1,613



523



336



2,472Infrastructure


905



445



185



1,535



789



285



141



1,215



713



281



120



1,114SAP Group


26,825



13,457



11,254



51,536



23,654



10,629



9,578



43,861



22,339



9,109



7,750



39,198              97




---



##### Table of Contents



SHARE OWNERSHIP Beneficial Ownership
    of Shares
   SHARE-BASED
    COMPENSATION PLANS SAP Stock Option
    Plan 2002
      Long Term Incentive
    2000 Plan
     98




---



##### Table of Contents



tm
      Stock Appreciation
    Rights (STAR) Plans
   99




---



##### Table of Contents



Incentive Plan 2010
    Virtual Stock Option
    Plan 2007
    German Employee
    Stock Purchase Plans
    U.S. Employee Stock
    Purchase Plans
   100




---



##### Table of Contents



Other Foreign Stock
    Purchase Plans
     ITEM 7. MAJOR
    SHAREHOLDERS AND RELATED-PARTY TRANSACTIONS MAJOR SHAREHOLDERS   Wertpapierhandelsgesetz
 101




---



##### Table of Contents



Ordinary SharesBeneficially Owned% ofMajor Shareholders

Number


OutstandingDietmar Hopp,
    collectively(1)


110,273,200



8.996
%Hasso Plattner, Chairperson Supervisory Board,
    collectively(2)


128,987,982



10.522
%Klaus Tschira,
    collectively(3)


109,754,305



8.953
%Executive Board Members as a group (7 persons)


88,527



0.007
%Supervisory Board Members as a group (16 persons)


128,994,969



10.523
%Executive Board Members and Supervisory Board Members as a
    group (23 persons)


129,083,496



10.530
%Options and convertible bonds that are vested and exercisable
    within 60 days of March 9, 2009, held by Executive
    Board Members and Supervisory Board Members,
    collectively(4)


914,997



N/A      (1)
    Includes Dietmar Hopp Stiftung GmbH and DH Besitzgesellschaft
    mbH & Co. KG in which Dietmar Hopp exercises sole
    voting and dispositive power.(2)
    Includes Hasso Plattner Förderstiftung gGmbH and Hasso
    Plattner GmbH & Co. Beteiligungs-KG in which Hasso
    Plattner exercises sole voting and dispositive power.(3)
    Includes Klaus Tschira Stiftung gGmbH and Dr. h. c. Tschira
    Beteiligungs GmbH & Co. KG in which Klaus Tschira
    exercises sole voting and dispositive power.(4)
    Includes 511,147 stock options and 403,850 convertible bonds.
    Each of these stock options and convertible bonds entitles the
    holder, if exercised or converted, to four SAP AG ordinary
    shares.   RELATED-PARTY
    TRANSACTIONS  ITEM 8.
    FINANCIAL INFORMATION CONSOLIDATED
    FINANCIAL STATEMENTS  OTHER FINANCIAL
    INFORMATION Legal Proceedings
   102




---



##### Table of Contents



Dividend Policy
    Significant Changes
     ITEM 9. THE
    OFFER AND LISTING GENERAL
  Freiverkehr
   103




---



##### Table of Contents



AktG
           104




---



##### Table of Contents



TRADING ON THE
    FRANKFURT STOCK EXCHANGE AND THE NYSE
    Price perOrdinary
    Share(1)


DAX(2)


Price per ADRHigh


Low


High


Low


High


LowIn 


In 


In US$Annual Highs and Lows2004


35.68



29.03



4,261.79



3,646.99



45.45



35.502005


38.95



28.63



5,458.58



4,178.10



46.43



36.962006


46.86



34.56



6,611.81



5,292.14



57.00



43.572007


42.27



33.37



8,105.69



6,447.70



59.86



44.452008


39,93



23,45



7,949.11



4,127.41



58.98



29.70Quarterly Highs and Lows2007First Quarter


42.27



33.37



7,027.59



6,447.70



55.71



44.45Second Quarter


38.15



33.65



8,090.49



6,937.17



51.35



45.08Third Quarter


41.76



36.61



8,105.69



7,270.07



58.67



49.85Fourth Quarter


41.66



34.31



8,076.12



7,511.97



59.86



50.052008First Quarter


34.88



29.96



7,949.11



6.182,30



51.93



45.77Second Quarter


35.52



31.50



7,225.94



6,418.32



55.20



48.72Third Quarter


39.93



32.38



6,609.63



5,807.08



58.98



51.40Fourth Quarter


36.98



23.45



5,806.33



4,127.41



51.85



29.70Monthly Highs and Lows2008July


37.26



32.38



6,536.09



6,081.70



58.98



51.40August


38.71



37.00



6,609.63



6,236.96



58.56



55.71September


39.93



36.97



6,518.47



5,807.08



58.13



52.19October


36.98



23.45



5,806.33



4,295.67



51.85



30.22November


29.44



23.80



5,278.04



4,127.41



38.38



29.70December


27.74



24.10



4,810.20



4,381.47



36.27



32.212009January


27.85



25.91



5,026.31



4,178.94



37.62



33.30February


29.64



25.52



4,666.82



3,843.74



38.61



32.14March (through March 9, 2009)


26.43



25.00



3,890.94



3,666.41



33.11



31.69     (1)
    Share prices for 2006 and prior are retrospectively adjusted for
    the effect of the fourfold increase in the number of shares
    resulting from the capital increase which became effective
    December 15, 2006 (see the immediately preceding section
     General for more detail of the share
    increase).(2)
    The DAX is a continuously updated, capital-weighted performance
    index of 30 German blue chip companies. In principle, the shares
    included in the DAX are selected on the basis of their stock
    exchange turnover and the issuers market capitalization.
    Adjustments to the DAX are made for capital changes,
    subscription rights and dividends.   105




---



##### Table of Contents



ITEM 10.
    ADDITIONAL INFORMATION ARTICLES OF
    INCORPORATION Organization and
    Register
  Aktiengesetz Handelsregister www.ebundesanzeiger.de
  Objectives and
    purposes
    
    developing and marketing integrated product and service
    solutions for
    e-commerce;
    developing software for information technology and the licensing
    of its use to others;
    organization and deployment consulting, as well as user
    training, for
    e-commerce
    and other software solutions;
    selling, leasing, renting and arranging the procurement and
    provision of all other forms of use of information technology
    systems and related equipment; and
    making capital investments in enterprises active in the field of
    information technology to promote the opening and advancement of
    international markets in the field of information technology.   CORPORATE GOVERNANCE Introduction
   106




---



##### Table of Contents



www.sap.com/about/governance/statutes/declarationofimplementation.epx
        Satzung
  The Supervisory Board
      Mitbestimmungsgesetz
 107




---



##### Table of Contents



Audit Committee Prüfungsausschuss Form 20-F.
     108




---



##### Table of Contents



General Committee (Präsidialausschuss)
  Compensation Committee (Personalausschuss)
  Finance and Investment Committee (Finanz- und
    Investitionsausschuss)
  Mitbestimmungsgesetz Mediation Committee
    (Vermittlungsausschuss)
  Strategy and Technology Committee (Strategie- und
    Technologieausschuss)
  Nomination Committee (Nominierungsausschuss)
  Special Committee Sonderausschuss
      The Executive Board
      Prokurist
 109




---



##### Table of Contents



The Annual General
    Meeting of Shareholders
     CHANGE IN CONTROL   Wertpapiererwerbs- und
    Übernahmegesetz Bundesanstalt für
 110




---



##### Table of Contents



Finanzdienstleistungsaufsicht
  Handelsgesetzbuch www.sap.com
 CHANGE IN SHARE
    CAPITAL      RIGHTS ACCOMPANYING
    OUR SHARES  111




---



##### Table of Contents



Voting Rights
    
    changing the corporate purpose of the company set out in the
    articles of incorporation;
    capital increases and capital decreases;
    excluding preemptive rights of shareholders to subscribe for new
    shares;
    dissolution;
    a merger into, or a consolidation with, another company;
    a transfer of all or virtually all of the assets; and
    a change of corporate form.  Dividend Rights
    Preemptive Rights
  Bezugsrecht
  Liquidation
    Disclosure of
    Shareholdings
  Wertpapierhandelsgesetz
   112




---



##### Table of Contents



Risikobegrenzungsgesetz
  Exchange Controls
    and Other Limitations Affecting Security Holders
  Deutsche Bundesbank
 TAXATION General
    German
    Taxation of Holders of ADRs or Ordinary Shares
  Form 20-F
   113




---



##### Table of Contents



German Taxation of
    Dividends
      e.g.
     114




---



##### Table of Contents



Refund of
    German Tax to U.S. Holders
  U.S.-German
  http://www.bzst.bund.de
  19101-2530 19720-2425.
        Refund of
    German Tax to Holders of ADRs or Ordinary Shares in Other
    Countries
   115




---



##### Table of Contents



http://www.bzst.bund.de
  German
    Taxation of Capital Gains
            Reform of
    the Taxation of Dividends and Capital Gains
           116




---



##### Table of Contents



Other German Taxes
    German Estate and
    Gift Taxes
  U.S.-German
    U.S. Taxation of
    U.S. Holders of Ordinary Shares or ADRs
     117




---



##### Table of Contents



Form 20-F.
  FORM 20-F
    Distributions
       118




---



##### Table of Contents



Sale or
    Exchange
      Foreign
    Tax Credit
    U.S.-source
    Passive
    Foreign Investment Company Considerations
  Classification as a PFIC. non-U.S. corporation,
 119




---



##### Table of Contents



Consequences of PFIC Status.
      Taxation of Holders
    of ADRs or Ordinary Shares in Other Countries
   MATERIAL CONTRACTS Loan Facility
   120




---



##### Table of Contents



Form 20-F
  Credit Facility
             121




---



##### Table of Contents



Form 20-F
 DOCUMENTS ON DISPLAY Form 20-F www.sec.gov www.sap.com
 ITEM 11. QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        FOREIGN CURRENCY
    EXCHANGE RATE RISK      122




---



##### Table of Contents




    derivatives held within a designated cash-flow hedging
    relationship and
    foreign currency embedded derivatives (which arise for instance
    due to a foreign-currency denominated contract in Switzerland).     INTEREST RATE RISK    123




---



##### Table of Contents




    Changes in interest rates only affect nonderivative fixed-rate
    financial instruments if they are recognized at fair value. As
    we have classified our investments as available for sale we
    carry interest-rate sensitive debt investments at fair value
    with fair value changes recognized in other comprehensive
    income. For this reason, changes in prevailing market rates are
    included in the equity-related sensitivity calculation.
    Income or expenses for nonderivative financial instruments with
    variable interest are subject to interest rate risk if they are
    not hedged items in an effective hedging relationship. We
    therefore have no significant interest-rate risk arising from
    our financial liabilities and consider interest rate changes for
    our variable rate debt investments in the earnings-related
    sensitivity calculation.
    Due to the aforementioned designation of interest rate
    derivatives to a cash-flow hedge relationship, the respective
    interest rate changes affect the unrealized interest rate
    cash-flow hedge position in other comprehensive income. The
    movements related to the interest rate swaps variable leg
    are not reflected in the sensitivity calculation as they offset
    the variable interest payments for the credit facility. We
    therefore consider only changes from the interest rate
    swaps fixed leg in the equity-related sensitivity
    calculation for the interest swaps in a hedge relationship.
    As the deal contingent interest rate payer swaps are
    freestanding derivatives with fair value fluctuations charged to
    profit or loss we include only changes from the interest rate
    swaps fixed leg in the earnings-related sensitivity
    calculation. The movements related to the interest rate
    swaps variable leg are not reflected in the sensitivity
    calculation as they offset the variable interest payments for
    the credit facility.         EQUITY PRICE RISK  124




---



##### Table of Contents



OTHER RISKS Share-Based
    Compensation Hedging
      Credit Risk
    Liquidity Risk
   ITEM 12. DESCRIPTION
    OF SECURITIES OTHER THAN EQUITY SECURITIES  PART II ITEM 13. DEFAULTS,
    DIVIDEND ARREARAGES AND DELINQUENCIES  ITEM 14. MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS  ITEM 15. CONTROLS
    AND PROCEDURES EVALUATION OF
    DISCLOSURE CONTROLS AND PROCEDURES  125




---



##### Table of Contents



MANAGEMENTS
    ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Rules 13a-15(f) 15d-15(f)
       CHANGE IN INTERNAL
    CONTROL OVER FINANCIAL REPORTING Form 20-F
 REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Supervisory Board of SAP
    AG:



We have audited SAP AGs internal control over financial
    reporting as of December 31, 2008, based on criteria
    established in Internal Control  Integrated
    Frameworkissued by the Committee of Sponsoring
    Organizations of the Treadway Commission (COSO). SAP AGs
    management is responsible for maintaining effective internal
    control over financial reporting and for its assessment of the
    effectiveness of internal control over financial reporting,
    included in the accompanying Managements Annual Report on
    Internal Control Over Financial Reporting. Our responsibility is
    to express an opinion on the Companys internal control
    over financial reporting based on our audit.



We conducted our audit in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether effective internal control
    over financial reporting was maintained in all material
    respects. Our audit included obtaining an understanding of
    internal control over financial reporting, assessing

126




---



##### Table of Contents



Internal Control  Integrated Framework
    
  Mannheim, Germany
 March 25, 2009
 ITEM 16. [RESERVED] ITEM 16A. AUDIT
    COMMITTEE FINANCIAL EXPERT Rule 10A-3
 ITEM 16B. CODE
    OF ETHICS Form 20-F.
 127




---



##### Table of Contents



www.sap.com/corpgovernance
 ITEM 16C. PRINCIPAL
    ACCOUNTANT FEES AND SERVICES AUDIT FEES,
    AUDIT-RELATED FEES, TAX FEES AND ALL OTHER FEES  AUDIT
    COMMITTEES PRE-APPROVAL POLICIES AND PROCEDURES     1.
    Prohibited services: This category includes services
    that our independent auditors must not be engaged to perform.
    These are services that are not permitted by applicable law or
    that would be inconsistent with maintaining the auditors
    independence.2.
    Services requiring universal approval: Services of
    this category may be provided by our independent auditors up to
    a certain aggregate amount in fees per year that is determined
    annually by the Audit Committee.3.
    Services requiring individual approval: Services of
    this category may only be provided by our independent auditors
    if they have been individually (specifically) pre-approved by
    the Audit Committee or an Audit Committee member who is
    authorized by the Audit Committee to make such approvals.   128




---



##### Table of Contents



ITEM 16D. EXEMPTIONS
    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES Rule 10A-3 Rule 10A-3 Rule 10A-3
  Rule 10A-3.
 ITEM 16E. PURCHASES
    OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS   (b)


(c)


(d)(a)


Average


Total Number of Shares


Maximum Number ofTotal Number


Price Paid


Purchased as Part of


Shares that May Yetof Shares


per Share


Publicly Announced


Be Purchased UnderPeriod

Purchased


(in )


Plans or Programs


the Plans or ProgramsJanuary 1/1/08  1/31/08


0







0



77,023,001February 2/1/08  2/28/08


3,339,428



32,47



3,339,428



74,926,777March 3/1/08  3/31/08


4,687,699



31,98



4,687,699



70,324,007April 4/1/08  4/30/08


0







0



70,372,708May 5/1/08  5/31/08


3,813,435



32,58



3,813,435



66,606,519June 6/1/08  6/30/08


0







0



66,777,219July 7/1/08  7/31/08


0







0



66,868,806August 8/1/08  8/31/08


2,361,207



37,83



2,361,207



64,985,901September 9/1/08  9/30/08


400,000



37,32



400,000



83,915,467October 10/1/08  10/31/08


0







0



83,975,123November 11/1/08  11/30/08


0







0



84,049,348December 12/1/08  12/31/08


0







0



84,119,556Total


14,601,769



33,34



14,601,769    129




---



##### Table of Contents



ITEM 16F. CHANGES
    IN REGISTRANTSS CERTIFYING ACCOUNTANT  ITEM 16G. DIFFERENCES
    IN CORPORATE GOVERNANCE PRACTICES http://www.sap.com/about/governance/statutes/index.epx
  Introduction
      Legal Framework
  Aktiengesetz Wertpapierhandelsgesetz Wertpapiererwerbs- und
    Übernahmegesetz Handelsgesetzbuch
  www.sap.com/about/governance/statutes/index.epx
 130




---



##### Table of Contents



Significant
    Differences
    German Stock
    Corporations are Required to have a Two-Tier Board System
    Director
    Independence Rules
      Mitbestimmungsgesetz
 131




---



##### Table of Contents



tie-breaking
  Audit Committee
    Independence
  Rule 10A-3 Rule 10A-3 A-3
    Rules on
    Non-Management Board Meetings are Different
    Rules on
    Establishing Committees Differ
  Mitbestimmungsgesetz Vermittlungsausschuss 2 3
  Rules on
    Shareholders Compulsory Approval are Different
     132




---



##### Table of Contents



Specific Principles
    of Corporate Governance
    Specific Code of
    Business Conduct
   PART III ITEM 17. FINANCIAL
    STATEMENTS  ITEM 18. FINANCIAL
    STATEMENTS   Form 20-F:
  
    Report of Independent Registered Public Accounting Firm.
    Consolidated Statements of Income for the years ended 2008, 2007
    and 2006.
    Consolidated Balance Sheets as of December 31, 2008 and
    2007.
    Consolidated Statements of Shareholders Equity for the
    years ended December 31, 2008, 2007 and 2006.
    Consolidated Statements of Comprehensive Income for the years
    ended December 31, 2008, 2007 and 2006.
    Consolidated Statements of Cash Flows for the years ended
    December 31, 2008, 2007 and 2006.
    Notes to Consolidated Financial Statements. ITEM 19. EXHIBITS Form 20-F:
  1


Articles of Incorporation (Satzung) of SAP AG, as amended
    to date (English
    translation).(1)2
.1

Form of global share certificate for ordinary shares (English
    translation).(1) 133




---



##### Table of Contents



2
.2

Form of American Depositary
    Receipt.(2)4
.1

Form of Amended and Restated Deposit Agreement among SAP AG,
    Deutsche Bank Trust Company Americas, as Depositary, and
    all owners and holders from time to time of American Depositary
    Receipts issued thereunder, including the form of American
    Depositary Receipts, dated as of December 3,
    2004.(3)4
.2

Amendment No. 1 dated as of December 20, 2006 to
    Amended and Restated Deposit Agreement among SAP AG, Deutsche
    Bank Trust Company Americas, as Depository, and all owners
    and holders from time to time of American Depositary Receipts
    issued thereunder, including the form of American Depositary
    Receipts.(2)4
.3

Tender Offer Agreement dated as of October 7, 2007 between
    SAP AG and Business Objects
    S.A.(4)4
.3.1

Assignment and Assumption Agreement dated as of October 22,
    2007 between SAP AG and SAP France
    S.A.(4)4
.4

Amendment and Restatement Agreement relating to the
    5,000,000,000 (subsequently reduced to
    2,947,679,513.45) Syndicated Multicurrency Term Loan
    Facility Agreement dated October 1, 2007 by and among SAP
    AG (Borrower), Deutsche Bank AG, ABN Amro Bank N.V.,
    Niederlassung Deutschland, BNP Paribas S.A., Commerzbank
    Aktiengesellschaft, J.P. Morgan plc and Sumitomo Mitsui
    Banking Corporation (Mandated Lead Arrangers), Deutsche Bank AG
    Paris Branch (Offer Guarantor), Deutsche Bank Luxemburg S.A.
    (Agent) and Certain Financial Institutions
    (Lenders).(5)4
.4.1

Accession Agreement relating to the 5,000,000,000
    (subsequently reduced to 2,947,679,513.45) Syndicated
    Multicurrency Term Loan Facility Agreement dated October 1,
    2007 by and among SAP AG (Borrower), Deutsche Bank AG, ABN Amro
    Bank N.V., Niederlassung Deutscheland, BNP PARIBAS S.A.,
    Commerzbank Aktiengesellschaft, J.P. Morgan plc and
    Sumitomo Mitsui Banking Corporation (Mandated Lead Arrangers),
    Deutsche Bank AG Paris Branch (Offer Guarantor), certain
    financial institutions (Existing Lenders), certain financial
    institutions (New Lenders), and Deutsche Bank Luxembourg S.A.
    (Agent).(5)8


Subsidiaries, Equity Method Investments, and Other Investments
    of SAP AG.12
.1

Certification of Henning Kagermann, Co-Chief Executive Officer,
    required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).12
.2

Certification of Léo Apotheker, Co-Chief Executive Officer,
    required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).12
.3

Certification of Werner Brandt, Chief Financial Officer,
    required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a).13
.1

Certification of Henning Kagermann, Co-Chief Executive Officer,
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.13
.2

Certification of Léo Apotheker, Co-Chief Executive Officer,
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.13
.3

Certification of Werner Brandt, Chief Financial Officer,
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.15


Consent of Independent Registered Public Accounting Firm.     (1)
    
    Incorporated by reference to the Annual Report on
    Form 20-F
    of SAP AG filed on March 22, 2006.(2)
    
    Incorporated by reference to Post Effective Amendment No. 1
    to
    Form F-6
    filed on December 20, 2006.(3)
    
    Incorporated by reference to the Current Report on
    Form 6-K
    of SAP AG, filed on December 13, 2004.(4)
    
    Incorporated by reference to the Tender Offer Statement on
    Schedule TO filed with the SEC by SAP France S.A. on
    December 4, 2007.(5)
    
    Incorporated by reference to the Annual Report on
    Form 20-F
    of SAP AG filed on April 2, 2008. 134




---



##### Table of Contents



SIGNATURES
  Form 20-F
     By: /s/
    HENNING
    KAGERMANN     Dated: March 26, 2009
  By: /s/
    LÉO
    APOTHEKER  Name: Léo Apotheker
 Title: Co-Chief Executive Officer
  Dated: March 26, 2009
  By: /s/
    WERNER
    BRANDT  Name: Dr. Werner Brandt
 Title: Chief Financial Officer
  Dated March 26, 2009
 135




---



##### 



SAP AG AND
    SUBSIDIARIES
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
    
 PageReport of Independent Registered Public
    Accounting Firm


F-1Consolidated Financial Statements:Consolidated Statements of Income for the years
    ended December 31, 2008, 2007 and 2006


F-2Consolidated Balance Sheets as of
    December 31, 2008 and 2007


F-3Consolidated Statements of Shareholders
    Equity for the years ended December 31, 2008, 2007 and
    2006


F-4Consolidated Statements of Comprehensive Income
    for the years ended December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


F-6Notes to Consolidated Financial Statements


F-7




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  The Supervisory Board of SAP AG:
          
  Mannheim, Germany
 March 25, 2009
 F-1




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
 for
    the years ended December 31,
  Note


2008(1)


2008


2007


2006 millions, unless otherwise statedSoftware revenue






5,019



3,606



3,407



3,003Support revenue






6,393



4,593



3,838



3,464Subscription and other software-related service revenue






359



258



182



129Software and software-related service revenue






11,771



8,457



7,427



6,596Consulting revenue






3,477



2,498



2,221



2,249Training revenue






604



434



410



383Other service revenue






149



107



113



96Professional services and other service revenue






4,230



3,039



2,744



2,728Other revenue






96



69



71



69Total revenue


(5
)


16,097



11,565



10,242



9,393Cost of software and software-related services






(2,291
)


(1,646
)


(1,310
)


(1,091
)Cost of professional services and other services






(3,196
)


(2,296
)


(2,091
)


(2,073
)Research and development






(2,270
)


(1,631
)


(1,458
)


(1,335
)Sales and marketing






(3,535
)


(2,540
)


(2,162
)


(1,908
)General and administration






(867
)


(623
)


(506
)


(464
)Other operating income/expense, net


(7
)


15



11



17



56Total operating expenses






(12,144
)


(8,725
)


(7,510
)


(6,815
)Operating income






3,953



2,840



2,732



2,578Other non-operating income/expense, net


(8
)


(35
)


(25
)


1



(12
)Financial income/expense, net


(9
)


(86
)


(62
)


124



122Income from continuing operations before income taxes






3,832



2,753



2,857



2,688Income taxes


(10
)


(1,148
)


(825
)


(921
)


(805
)Minority interests






(1
)


(1
)


(2
)


(2
)Income from continuing operations






2,682



1,927



1,934



1,881Loss from discontinued operations, net of tax


(11
)


(82
)


(59
)


(15
)


(10
)Net income






2,600



1,868



1,919



1,871Earnings per share from continuing operations 
    basic in 


(12
)


2.25



1.62



1.60



1.53Earnings per share from continuing operations 
    diluted in 


(12
)


2.25



1.62



1.60



1.53Earnings per share from net income  basic
    in 


(12
)


2.18



1.57



1.59



1.53Earnings per share from net income  diluted
    in 


(12
)


2.18



1.57



1.59



1.52     (1)
    
    The 2008 figures have been
    translated solely for the convenience of the reader at an
    exchange rate of US$1.3919 to 1.00, the Noon Buying Rate
    certified by the Federal Reserve Bank of New York on
    December 31, 2008.  The accompanying Notes are an
    integral part of these Consolidated Financial Statements.
 F-2




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 as
    of December 31,
  Note


2008(1)


2008


2007 millionsCash and cash equivalents


(13
)


1,777



1,277



1,608Restricted cash


(13
)


4



3



550Short-term investments


(13
)


532



382



598Accounts receivable, net


(14
)


4,354



3,128



2,895Other assets


(15
)


981



705



541Deferred income taxes


(10
)


283



203



125Prepaid expenses/deferred charges






117



84



76Assets held for sale


(11
)


0



0



15Current assets






8,048



5,782



6,408Goodwill


(16
)


6,972



5,009



1,423Intangible assets, net


(16
)


1,569



1,127



403Property, plant and equipment


(17
)


1,956



1,405



1,316Investments


(13
)


132



95



89Accounts receivable, net


(14
)


3



2



3Other assets


(15
)


788



566



555Deferred income taxes


(10
)


260



187



146Prepaid expenses/deferred charges






33



24



23Noncurrent assets






11,713



8,415



3,958Total assets






19,761



14,197



10,366Accounts payable


(18
)


749



538



715Income tax obligations






505



363



341Financial liabilities


(18
)


3,583



2,574



82Other liabilities


(18
)


2,068



1,486



1,374Provisions


(19
)


298



214



154Deferred income taxes


(10
)


67



48



47Deferred Income


(5
)


850



611



477Liabilities held for sale


(11
)


0



0



9Current liabilities






8,120



5,834



3,199Accounts payable


(18
)


7



5



10Income tax obligations






387



278



90Financial liabilities


(18
)


50



36



6Other liabilities


(18
)


131



94



73Provisions


(19
)


692



497



369Deferred income taxes


(10
)


219



157



73Deferred income


(5
)


85



61



42Noncurrent liabilities






1,570



1,128



663Total liabilities






9,690



6,962



3,862Minority interests






3



2



1Common stock, no par values






1,706



1,226



1,246Authorized  Not issued or outstanding:
    480 million at December 31, 2008 and December 31,
    2007Authorized  Issued and outstanding:
    1.226 million and 1.246 million shares at
    December 31, 2008 and December 31, 2007Treasury stock






(1,896
)


(1,362
)


(1,734
)Additional paid-in capital






445



320



347Retained earnings






10,730



7,709



7,159Accumulated other comprehensive loss






(919
)


(660
)


(515
)Shareholders equity


(20
)


10,068



7,233



6,503Total liabilities and shareholders equity






19,761



14,197



10,366     (1)
    
    The 2008 figures have been
    translated solely for the convenience of the reader at an
    exchange rate of US$1.3919 to 1.00, the Noon Buying Rate
    certified by the Federal Reserve Bank of New York on
    December 31, 2008.  The accompanying Notes are an
    integral part of these Consolidated Financial Statements.
 F-3




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
 for
    the years ended December 31,
  AccumulatedAdditional





otherCommon


paid-in


Retained


comprehensive


Treasurystock


capital


earnings


income/loss


stock


Total millionsJanuary 1, 2006


316



352



5,980



(91
)


(775
)


5,782Net Income


0



0



1,871



0



0



1,871Other comprehensive income/loss, net of tax


0



0



0



(220
)


0



(220
)Total comprehensive income/loss


0



0



1,871



(220
)


0



1,651Share-based compensation


0



18



0



0



0



18Dividends


0



0



(447
)


0



0



(447
)Cancellation of treasury stock


0



0



0



0



0



0Other treasury stock transactions


0



44



0



0



(967
)


(923
)Convertible bonds and stock options exercised


1



49



0



0



0



50Issuance of common stock


951



(135
)


(816
)


0



0



0Other


0



4



1



0



0



5December 31, 2006


1,268



332



6,589



(311
)


(1,742
)


6,136Net Income


0



0



1,919



0



0



1,919Other comprehensive income/loss, net of tax


0



0



0



(204
)


0



(204
)Total comprehensive income/loss


0



0



1,919



(204
)


0



1,715Share-based compensation


0



(40
)


0



0



0



(40
)Dividends


0



0



(556
)


0



0



(556
)Cancellation of treasury stock


(23
)


0



(796
)


0



819



0Other treasury stock transactions


0



12



0



0



(811
)


(799
)Convertible bonds and stock options exercised


1



43



0



0



0



44Other


0



0



3



0



0



3December 31, 2007


1,246



347



7,159



(515
)


(1,734
)


6,503Net Income


0



0



1,868



0



0



1,868Other comprehensive income/loss, net of tax


0



0



0



(145
)


0



(145
)Total comprehensive income/loss


0



0



1,868



(145
)


0



1,723Share-based compensation


0



(34
)


0



0



0



(34
)Dividends


0



0



(594
)


0



0



(594
)Cancellation of treasury stock


(21
)


0



(723
)


0



744



0Other treasury stock transactions


0



(6
)


0



0



(372
)


(378
)Convertible bonds and stock options exercised


1



13



0



0



0



14Other


0



0



(1
)


0



0



(1
)December 31, 2008


1,226



320



7,709



(660
)


(1,362
)


7,233   This Statement is an integral part
    of Note 20.
 F-4




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
 for
    the years ended December 31,
  2008


2007


2006 millionsNet income


1,868



1,919



1,871Currency translation adjustments


(21
)


(194
)


(149
)Unrealized holding gains/losses on marketable securities
    (tax 2008: 1; 2007: 0; 2006: 0)


1



(2
)


(8
)Reclassification adjustments on marketable securities for
    gains/losses included in net income
    (tax 2008: -1; 2007: 0; 2006: -1)


(3
)


(1
)


2Net unrealized gains/losses on marketable securities


(2
)


(3
)


(6
)Unrecognized pension costs
    (tax 2008: 19; 2007: 1; 2006: 2)


(47
)


(1
)


(12
)Unrealized foreign currency cash flow hedge and interest rate
    hedge gains/losses
    (tax 2008: 13; 2007: -6; 2006: -15)


(50
)


55



41Reclassification foreign currency cash flow hedge and interest
    rate hedge adjustments for gains/losses included in net
    income
    (tax 2008: 9; 2007: 4; 2006: 4)


(36
)


(43
)


(10
)Net unrealized foreign currency cash flow hedge and interest
    rate hedge gains/losses


(86
)


12



31Unrealized gains on STAR hedge
    (tax 2008: -11; 2007: -3; 2006: -13)


32



10



37Reclassification adjustments on STAR hedge for gains included in
    net income
    (tax 2008: 6; 2007: 9; 2006: 39)


(19
)


(28
)


(111
)Net unrealized losses on STAR hedge


13



(18
)


(74
)Currency effects from intercompany long-term investment
    transactions


(38
)


(5
)


(26
)Tax on income and expense items recognized directly in
    equity


36



5



16Other comprehensive income/loss


(145
)


(204
)


(220
)Total comprehensive income


1,723



1,715



1,651   The accompanying Notes are an
    integral part of these Consolidated Financial Statements.
 F-5




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS

for
    the years ended December 31, 2008(1)


2008


2007


2006 millionsNet income


2,600



1,868



1,919



1,871Net loss from discontinued operations


82



59



15



10Minority interests


1



1



2



2Income from continuing operations before minority
    interests


2,684



1,928



1,936



1,883Adjustments to reconcile income from continuing operations
    before minority interests to net cash provided by operating
    activities:Depreciation and amortization


763



548



261



214Gains/losses from equity investees


(1
)


(1
)


1



1Gains/losses on disposal of intangible assets and property,
    plant, and equipment


6



4



1



(2
)Gains on disposal of investments


(21
)


(15
)


(2
)


0Writedowns of financial assets


21



15



8



0Allowances for doubtful accounts


106



76



0



(40Impacts of hedging for cash-settled share-based payment plans


54



39



21



(79
)Share-based compensation including income tax benefits


26



19



13



82Excess tax benefit from share-based compensation


(10
)


(7
)


0



(3
)Deferred income taxes


(93



(67
)


8



(2
)Change in accounts receivable


(70
)


(50
)


(521
)


(230
)Change in other assets


(164
)


(118
)


(322
)


(216
)Change in accrued and other liabilities


(355
)


(255
)


423



130Change in deferred income


93



67



123



117Net cash provided by operating activities from continuing
    operations


3,039



2,183



1,950



1,855Acquisition of minority interests in subsidiaries


0



0



(48
)


0Business combinations, net of cash and cash equivalents acquired


(5,252
)


(3,773
)


(672
)


(504
)Repayment of acquirees debt in business combinations


(626
)


(450
)


0



0Purchase of intangible assets and property, plant, and equipment


(472
)


(339
)


(401
)


(365
)Proceeds from disposal of intangible assets and property, plant,
    and equipment


61



44



27



29Cash transferred to restricted cash


(628
)


(451
)


(550
)


0Use of restricted cash


1,393



1,001



0



0Purchase of investments


(529
)


(380
)


(768
)


(2,055
)Sales of investments


806



579



1,025



2,765Purchase of other financial assets


(22
)


(16
)


(20
)


(17
)Sales of other financial assets


22



16



15



15Net cash used in investing activities from continuing
    operations


(5,246
)


(3,769
)


(1,392
)


(132
)Dividends paid


(827
)


(594
)


(556
)


(447
)Purchase of treasury stock


(678
)


(487
)


(1,005
)


(1,149
)Proceeds from reissuance of treasury stock


118



85



156



165Proceeds from issuance of common stock (share-based compensation)


18



13



44



49Excess tax benefit from share-based compensation


10



7



0



3Repayment of bonds


0



0



0



(1
)Proceeds from short-term and long-term debt


5,371



3,859



47



44Repayments of short-term and long-term debt


(2,187
)


(1,571
)


(48
)


(43
)Proceeds from the exercise of equity-based derivative
    instruments (STAR hedge)


33



24



75



57Purchase of equity-based derivative instruments (hedge for
    cash-settled share-based payment plans)


(77
)


(55
)


0



(53
)Net cash provided by/used in financing activities from
    continuing operations


1,783



1,281



(1,287
)


(1,375
)Effect of foreign exchange rates on cash and cash
    equivalents


(1
)


(1
)


(49
)


(3
)Net cash used in operating activities from discontinued
    operations


(35
)


(25
)


(12
)


(8
)Net cash used in investing activities from discontinued
    operations


0



0



(1
)


(2
)Net cash used in financing activities from discontinued
    operations


0



0



0



0Net cash used in discontinued operations


(35
)


(25
)


(13
)


(10
)Net change in cash and cash equivalents


(461
)


(331
)


(791
)


335Cash and cash equivalents at the beginning of the period


2,238



1,608



2,399



2,064Cash and cash equivalents at the end of the period


1,777



1,277



1,608



2,399     (1)
    
    The 2008 figures have been
    translated solely for the convenience of the reader at an
    exchange rate of US$1.3919 to 1.00, the Noon Buying Rate
    certified by the Federal Reserve Bank of New York on
    December 31, 2008.  The accompanying Notes are an
    integral part of these Consolidated Financial Statements.
 F-6




---



##### Table of Contents



SAP AG AND
    SUBSIDIARIES



NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS (1)
    GENERAL                 F-7




---



##### Table of Contents



(2)
    SCOPE OF
    CONSOLIDATION        Overview of Legal
    Entities Consolidated in the Financial Statements
  
    Associates
    (3)
    SUMMARY OF
    SIGNIFICANT ACCOUNTING POLICIES  Use of Estimates
   F-8




---



##### Table of Contents



Basis of Measurement
    
    Derivative financial instruments,
    available-for-sale
    financial assets and liabilities for cash-settled share-based
    payment arrangements are measured at fair value;
    Foreign exchange receivables and payables are translated at
    period-end exchange rates; and
    Pensions are measured according to Statement of Financial
    Accounting Standards (SFAS) No. 158
    (SFAS 158), Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans,as described in Note 19a.    Business Combinations
    Foreign Currencies
       F-9




---



##### Table of Contents



Exchange Rates
    Exchange
    Rates
  
  Revenue Recognition
           F-10




---



##### Table of Contents



time-and-materials
    97-2, (SOP 97-2), SOP 97-2
  SOP 97-2,
             F-11




---



##### Table of Contents



SOP 97-2
    time-and-material
    catch-up
  out-of-pocket out-of-pocket
     F-12




---



##### Table of Contents



Research and
    Development
    Government Grants
    Advertising Costs
    Leases
      Income Taxes
           F-13




---



##### Table of Contents



Share-Based
    Compensation
          Comprehensive
    Income/Loss
    available-for-sale.
  Earnings per Share
    Cash and Cash
    Equivalents
   F-14




---



##### Table of Contents



Investments
    available-for-sale. available-for-sale available-for-sale
    step-up
  other-than-temporary, other-than-temporary,
    Accounts Receivable
  time-and-material
 F-15




---



##### Table of Contents



Financial and Other
    Assets
          Derivatives
    Derivatives without
    designated hedge relationship
    Embedded derivatives
   F-16




---



##### Table of Contents



Derivatives with
    designated hedge relationship (cash-flow hedge)
    Valuation and
    testing of effectiveness
          Goodwill
     F-17




---



##### Table of Contents



Other Intangible
    Assets
      Property, Plant, and
    Equipment
      Useful lives
  
    Impairment of
    Long-Lived Assets
    Assets and
    Liabilities Held for Sale
     F-18




---



##### Table of Contents



Discontinued
    Operations
    Prepaid Expenses and
    Deferred Charges
    Pension Benefit
    Liabilities
  projected-unit-credit
    Provisions
     F-19




---



##### Table of Contents



EITF 95-3,
  Accounts Payable,
    Financial and Other Liabilities
      Deferred Income
    Treasury Stock
    New Accounting
    Standards Not Yet Adopted
  157-2 SFAS 157-2.
   F-20




---



##### Table of Contents



EITF 07-1, (EITF 07-1), EITF 07-1 EITF 07-1 EITF 07-1
    FAS 142-3, (FSP 142-3), FSP 142-3 FSP 142-3
    EITF 08-6, (EITF 08-6),
 F-21




---



##### Table of Contents



EITF 08-6 EITF 08-6
  EITF 08-7, (EITF 08-7), EITF 08-7 EITF 08-7
  (4)
    ACQUISITIONS    
  and/or
 F-22




---



##### Table of Contents



Acquisition of
    Business Objects S.A.
        Business Objects
    Acquisition Cost
  
   F-23




---



##### Table of Contents



BOBJ Condensed
    Opening Balance sheet
  
   F-24




---



##### Table of Contents



BOBJ ProForma
  
    Identifiable
    Intangible Assets Acquired as part of business combinations in
    2008
  
 F-25




---



##### Table of Contents



Assignment of
    acquired goodwill to segments
  
 F-26




---



##### Table of Contents



Prior year
    acquisitions
    Prior
    year acquisitions
  
  and/or
   F-27




---



##### Table of Contents



Identifiable
    intangible assets acquired as part of business
    combinations
  
  (5) REVENUE
        (6) FUNCTIONAL
    COSTS AND OTHER EXPENSES
   F-28




---



##### Table of Contents



Personnel
    Expenses/Number of Employees
    Personnel
    Expenses
  
      Number of
    Employees
  
  Government Grants
      Advertising expenses
   F-29




---



##### Table of Contents



(7) OTHER
    OPERATING INCOME/EXPENSE, NET
    Other
    Operating Income/Expense, Net
  
  (8) OTHER
    NON-OPERATING INCOME/EXPENSE, NET
    Other
    Non-operating Income/Expense, Net
  
 F-30




---



##### Table of Contents



(9) FINANCIAL
    INCOME/EXPENSE, NET
    Financial
    Income/expense, Net
  
    case-by-case
   F-31




---



##### Table of Contents



(10) INCOME
    TAXES
    Income
    Tax Expense
  
        Income
    from Continuing Operations
  
 F-32




---



##### Table of Contents



Reconciliation
    of Income Tax Expense
  
 F-33




---



##### Table of Contents



Deferred
    Tax Assets and Liabilities
  
     F-34




---



##### Table of Contents



Total
    Income Taxes
  
     F-35




---



##### Table of Contents



Unrecognized
    Tax Benefits
  
        (11) ASSETS AND
    LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS
       F-36




---



##### Table of Contents



Results
    from Discontinued Operations
  
    Assets
    and Liabilities Held for Sale
  
  (12) EARNINGS
    PER SHARE
   F-37




---



##### Table of Contents



Earnings
    per Share
  
  (13)
    CASH AND CASH
    EQUIVALENTS, RESTRICTED CASH AND INVESTMENTS    Cash and
    Cash Equivalents, Restricted Cash and Financial Assets
  
 F-38




---



##### Table of Contents



Restricted Cash
    Debt Securities and
    Marketable Equity Securities
      Securities
  
    Marketable
    Securities in Loss Position
  
 F-39




---



##### Table of Contents



Debt
    Securities
  
  Equity Securities at
    Cost
      Equity Method
    Investments
    
   F-40




---



##### Table of Contents



(14)
    ACCOUNTS RECEIVABLE,
    NET      Carrying
    Amounts of Accounts Receivable
  
    Changes
    in the Allowance for Doubtful Accounts
  
    Aging of
    Accounts Receivable Gross
  
     F-41




---



##### Table of Contents



(15)
    OTHER ASSETS  Other
    Assets
  
           F-42




---



##### Table of Contents



(16)
    GOODWILL AND
    INTANGIBLE ASSETS  Goodwill
    and Intangible Assets
  
 F-43




---



##### Table of Contents



Estimated
    Future Amortization of Intangibles
  
    Goodwill
    by Segments
  
   F-44




---



##### Table of Contents



(17)
    PROPERTY, PLANT, AND
    EQUIPMENT  Property,
    Plant, and Equipment
  
 F-45




---



##### Table of Contents



(18)
    ACCOUNTS PAYABLE,
    FINANCIAL LIABILITIES AND OTHER LIABILITIES    Accounts
    Payable, Financial Liabilities and Other Liabilities
  2008

2007Term







Termless than

between 1

more than

Balance on

less than 1

between 1

more than

Balance on millions

1 year

and 5 years

5 years

31.12.2008

year

and 5 years

5 years

31.12.2007Payable to suppliers

506

3

0

509

688

6

0

694Advance payments received

32

2

0

34

27

4

0

31Accounts payable

538

5

0

543

715

10

0

725Bank loans and overdraft

2,319

1

1

2,321

25

2

0

27Other financial liabilities

255

33

0

288

57

4

0

61Financial liabilities

2,574

34

1

2,609

82

6

0

88Other employee-related liabilities

1,161

6

51

1,218

1,060

6

49

1,115Other taxes

268

0

0

268

262

0

0

262Miscellaneous other liabilities

57

23

15

95

52

11

7

70Other liabilities

1,486

29

66

1,581

1,374

17

56

1,4474,598

68

67

4,733

2,171

33

56

2,260            F-46




---



##### Table of Contents



Contractual
    maturities of financial liabilities
  
 F-47




---



##### Table of Contents



(19)
    PROVISIONS    Provisions
  
  a)
    Pension Plans and
    Similar Obligations      Liabilities
    Accrued for Pensions and Other Similar Obligations
  
     F-48




---



##### Table of Contents



Significant
    Components related to Defined Benefit Pension Plans
  
  Defined Benefit
    Pension Plans and Similar Obligations
      (401k-Plan
   F-49




---



##### Table of Contents



Change in
    the Present Value of the DBO and the Fair Value of the Plan
    Assets
  
    Actuarial
    Assumptions for Defined Benefit Liabilities
  
   F-50




---



##### Table of Contents



Cost of
    Defined Benefit Plans
  
    Unrecognized
    Pension Cost
  
   F-51




---



##### Table of Contents



Actuarial
    Assumptions for Net Periodic Benefit Cost
  
  Pension Assets
      Plan
    Asset Allocation for Foreign Pension Plans
    and Other Post-Employment Obligations
  
 F-52




---



##### Table of Contents



Funded Status of
    Domestic and Foreign Plans
    Funded
    Status of Plans with Accumulated Benefit
    Obligation in excess of Plan Assets
  
   
 F-53




---



##### Table of Contents



Expected Future
    Contributions and Benefits
      Estimated
    Future Pension Benefit Payments
  
  Defined Contribution
    Pension Plans
    Employee-Financed
    Pension Plan
   F-54




---



##### Table of Contents



(19) PROVISIONS
  b) Other
    Obligations
    Other
    Obligations
  
        EITF 95-3, (EITF 95-3)
   F-55




---



##### Table of Contents



Restructuring
    obligations
  
    Changes
    in warranty accruals
  
 F-56




---



##### Table of Contents



(20)
    SHAREHOLDERS
    EQUITY  Common Stock
        Shareholdings
    in SAP AG (> 5% directly or indirectly)
  
  Authorized Capital
    
    Up to a total amount of 60 million through the
    issuance of new common shares in return for contributions in
    cash until May 11, 2010 (Authorized Capital I).
    The issuance is subject to the statutory subscription rights of
    existing shareholders.
    Up to a total amount of 180 million through the
    issuance of new common shares in return for contributions in
    cash until May 8, 2011 (Authorized Capital Ia).
    The issuance is subject to the statutory subscription rights of
    existing shareholders.
    Up to a total amount of 60 million through the
    issuance of new common shares in return for contributions in
    cash or in kind until May 11, 2010 (Authorized
    Capital II). This capital increase could also be executed
    as a result of a business combination. Subject to certain
    preconditions and the consent F-57




---



##### Table of Contents



of the Supervisory Board, the Executive Board is authorized to
    exclude the shareholders statutory subscription rights.  
    Up to a total amount of 180 million through the
    issuance of new common shares in return for contributions in
    cash or in kind until May 8, 2011 (Authorized Capital
    IIa). This capital increase could also be executed as a
    result of a business combination. Subject to certain
    preconditions and the consent of the Supervisory Board, the
    Executive Board is authorized to exclude the shareholders
    statutory subscription rights.  Contingent Capital
    Treasury Stock
     F-58




---



##### Table of Contents



Accumulated Other
    Comprehensive Income/Loss
    Other
    Components of Equity
  
  
    Currency translation adjustments comprise all foreign currency
    differences arising from the translation of the financial
    statements of foreign operations.
    Unrealized gains and losses on marketable securities represent
    the net cumulative change between fair value and cost for
    available-for-sale financial assets since the respective
    acquisition date.
    Unrecognized pension costs comprise actuarial gains and losses
    relating to defined benefit pension plans and similar
    obligations.
    Gains and losses on foreign currency cash flow hedges comprise
    the net change in fair value of foreign currency cash flow
    hedges related to hedged transactions that have not impacted
    earnings, less the component of the financial instruments
    gain or loss that was excluded from the assessment of hedge
    effectiveness. In addition, gains and losses on the effective
    part of interest rate hedges are also included.
    Gains and losses on STAR hedges comprise the net change in fair
    value of cash flow hedging instruments associated with the
    unrecognized portion of nonvested STARs (see Note 25).
    Currency effects from intercompany long-term investments related
    to intercompany foreign currency transactions that are of a
    long-term investment nature.  Miscellaneous
      Additional Capital
    Disclosures
   F-59




---



##### Table of Contents



Capital
    Structure
  
         F-60




---



##### Table of Contents



(21)
    SUPPLEMENTAL CASH
    FLOW INFORMATION    (22)
    CONTINGENT
    LIABILITIES          (23)
    OTHER FINANCIAL
    COMMITMENTS   F-61




---



##### Table of Contents



Other
    Financial Commitments
  
    (24)
    LITIGATION AND CLAIMS  Intellectual
    Property Litigation
  U.S.-based
  U.S.-based
   F-62




---



##### Table of Contents



U.S.-based
  U.S.-based
  U.S.-based
    U.S.-based
  U.S.-based
 F-63




---



##### Table of Contents



U.S.-based
  U.S.-based
  Other Litigation
  U.S.-based
    U.S.-based
    (25)
    DERIVATIVE FINANCIAL
    INSTRUMENTS   F-64




---



##### Table of Contents



Fair
    values of Derivative Financial Instruments
  
  Currency Hedging
    Derivatives
    without designated hedge relationship
     F-65




---



##### Table of Contents



Derivatives with
    designated hedge relationship (cash-flow hedges)
          Share-based
    compensation hedging
     F-66




---



##### Table of Contents



Share-based
    compensation Hedges
   
   *
    
    with designated hedge relationship         F-67




---



##### Table of Contents



Interest Rate Hedging
      Derivatives
    without designated hedge relationship
    Derivatives with
    designated hedge relationship  cash-flow
    hedges
    (26) FINANCIAL
    RISK MANAGEMENT
     F-68




---



##### Table of Contents



Foreign Currency
    Exchange Risk
                  
    derivatives held within a designated cash-flow hedging
    relationship and
    foreign currency embedded derivatives (which arise for instance
    due to a foreign-currency denominated contract in Switzerland).   F-69




---



##### Table of Contents



Interest-Rate Risk
            
    Changes in interest rates only affect nonderivative fixed-rate
    financial instruments if they are recognized at fair value. As
    we have classified our investments as available for sale we
    carry interest-rate sensitive debt investments at fair value
    with fair value changes recognized in Other comprehensive
    income/loss. For this reason, changes in prevailing market rates
    are included in the equity-related sensitivity calculation.
    Income or expenses for nonderivative financial instruments with
    variable interest are subject to interest rate risk if they are
    not hedged items in an effective hedging relationship. We
    therefore have no significant interest-rate risk arising from
    our financial liabilities and consider interest rate changes for
    our variable rate debt investments in the earnings-related
    sensitivity calculation.
    Due to the aforementioned designation of interest rate
    derivatives to a cash-flow hedge relationship, the respective
    interest rate changes affect the Unrealized interest rate
    cash-flow hedge position in Other comprehensive income/loss. The
    movements related to the interest rate swaps variable leg
    are not reflected in the sensitivity calculation as they offset
    the variable interest payments for the credit facility. We
    therefore consider only changes from the interest rate
    swaps fixed leg in the equity-related sensitivity
    calculation for the interest swaps in a hedge relationship.
    As the deal contingent interest rate payer swaps are
    freestanding derivatives with fair value fluctuations charged to
    profit or loss we include only changes from the interest rate
    swaps fixed leg in the earnings-related sensitivity
    calculation. The movements related to the interest rate
    swaps variable leg are not reflected in the sensitivity
    calculation as they offset the variable interest payments for
    the credit facility.   F-70




---



##### Table of Contents



Equity-Price Risk
      Credit Risk
       F-71




---



##### Table of Contents



Liquidity Risk
        Fair Value of
    Financial Instruments
      Fair Values of
    Financial Instruments
  
 F-72




---



##### Table of Contents




    Cash and cash equivalents, Accounts receivable, other
    nonderivative financial assets: Because the financial assets are
    primarily of short-term nature it is assumed that the fair
    values of these assets approximate their carrying values.
    Investments in insurance policies held for postemployment
    pension plans and semiretirement as well as prepaid pensions are
    valued at their cash surrender values. Non-interest-bearing or
    below market-rate loans to third parties or employees are
    discounted to the present value of estimated future cash flows
    using the original effective interest rate the respective
    borrower would have to pay to a bank for a similar loan. In case
    of bad debts and sales allowances the carrying amount is reduced
    accordingly.
    Investments: The fair values of marketable securities are based
    on quoted market prices as at December 31. For non-listed
    equity securities fair values could not readily be observed due
    to the absence of an active market with market prices. Also,
    calculating fair values by discounting estimated future cash
    flows is not possible as a determination of cash flows is not
    reliable. Therefore, fair values for nonlisted equity securities
    are not presented.
    Bank liabilities: As almost all our bank liabilities are
    variable interest debts their carrying values approximate their
    fair values.
    Accounts payable and other nonderivative financial liabilities:
    Because these financial liabilities are mainly of short-term
    nature it is assumed that their fair values approximate their
    carrying values.
    Derivative financial instruments: The fair value of foreign
    exchange forward contracts is based on discounting the expected
    future cash flows over the respective zero-coupon interest
    rates, spot rates and the remaining term of the contracts. The
    fair value of the derivatives entered into to hedge our
    share-based compensation programs are calculated considering
    risk-free interest rates, the remaining term of the derivatives,
    the dividend yields, the stock price and the volatility of our
    share. Fair values of our derivative interest rate contracts are
    calculated by discounting the expected future cash flows by
    taking the prevailing market rates for the remaining term of the
    contracts as a basis.
    The fair values of nonderivative financial assets and
    liabilities and of derivative financial instruments are
    generally determined for each type of instrument on an
    individual basis.  Determination of
    Fair Values
        
    Level 1: Quoted prices in active markets for identical
    assets or liabilities F-73




---



##### Table of Contents




    Level 2: Inputs other than observable, either directly or
    indirectly, such as quoted prices in active markets for similar
    assets or liabilities, quoted prices for identical or similar
    assets or liabilities in markets that are not active, or other
    inputs that are observable or can be corroborated by observable
    market data for substantially the full term of the assets or
    liabilities; or
    Level 3: Unobservable inputs that are supported by little
    or no market activity and that are significant to the fair value
    of the assets or liabilities    Classification of
    Financial Instruments
  
 F-74




---



##### Table of Contents



Fair Value
    Measurements Using Significant Unobservable Inputs (Level 3)
  
  Valuation
    Techniques  Level 1
    Valuation
    Techniques  Level 2
    Valuation
    Techniques  Level 3
   F-75




---



##### Table of Contents



Assets and
    Liabilities Measured at Fair Value on a Nonrecurring Basis
    (27) SHARE-BASED
    PAYMENT PLANS
    a)
    Employee Discounted
    Stock Purchase Programs    b)
    Cash-Settled
    Share-Based Payment Plans  b.1)
    Stock Appreciation
    Rights (STAR) Plans    
     F-76




---



##### Table of Contents



b. 2)
    Incentive Plan 2010   F-77




---



##### Table of Contents



tm
        Payout
    per Award
  
       F-78




---



##### Table of Contents



b.3)
    Virtual Stock Option
    Plan 2007           F-79




---



##### Table of Contents



b.4)
    Business Objects
    cash-settled awards based on former Business Objects option and
    Restricted Stock Unit plans      
    Stock options with a
    4-year
    monthly graded vesting schedule from grant date, subject to a
    minimum of one year of continued service with the Company. The
    contractual terms range from 7  10 years. The
    exercise price for one sub-category of the awards was equal to
    100% of the closing price of the Business Objects stock as
    reported on the Eurolist by Euronext on the last trading day
    prior to the option grant date; while the other subcategory of
    awards the exercise price was 100% of the average of the opening
    share price as reported on such market over the 20 trading days
    immediately preceding the historical grant date.
    International RSUs were subject to a
    3-year
    graded vesting schedule. These rights were provided free of
    charge to the employees (no exercise price).
    French RSUs had a two-year vesting period followed by a two-year
    holding period. These rights were also provided to the employees
    free of charge (no exercise price).    
    The replaced awards were planned to be settled by issuing equity
    instruments whereas the replacing awards are settled in cash
    either via the CPM or via the LAM mechanism. F-80




---



##### Table of Contents




    The replaced awards were indexed to Business Objects share
    price whereas the replacing awards are indexed to SAPs
    stock price as follows: SAPs offering price for Business
    Objects shares during the tender offer (42) is divided by
    SAP AGs share price at the tender offer closing date
    (32.28) and the result is multiplied by the weighted
    average SAP share closing price during the 20 trading days
    preceding the exercise or disposition date.            
         F-81




---



##### Table of Contents



c)  Equity
    Settled Share-Based Payment Plans
  c.1)
    Stock Option Plan
    2002            
 F-82




---



##### Table of Contents



Activities
    under SAP SOP 2002
  
      Status of
    Nonvested SAP SOP 2002 Options
  
    c.2) Long Term
    Incentive 2000 Plan
   F-83




---



##### Table of Contents



Summary
    of the LTI 2000 Plan
  
      (28)
    SEGMENT AND
    GEOGRAPHIC INFORMATION   F-84




---



##### Table of Contents



project-by-project
    
    The internal reporting to our CODM generally attributes revenue
    to the segment that is responsible for the related transaction
    regardless of revenue classification in our income statement.
    Thus, for example, the Training segments revenue includes
    certain amounts classified as software revenue. Since our
    segments are organized on the basis of products and services,
    the amounts of external revenue for the Product, Consulting and
    Training segments are materially consistent with the amounts of
    Software and software-related service revenue, Consulting
    revenue, and Training revenue, respectively, as reported in the
    Consolidated Statements of Income.
    The internal reporting to our CODM allocates expenses to the
    segments based on organizational structures and cost centers
    rather than cost classification to functional areas.
    The internal reporting to our CODM excludes share-based
    compensation expenses.
    Differences in foreign currency translations result in minor
    deviations between the amounts reported internally to our CODM
    and the amounts reported in the Consolidated Financial
    Statements.    
    In contrast to our U.S. GAAP revenue figures presented in
    our Consolidated Statements of Income, the revenue numbers in
    our management reporting system include the support revenue that
    would have been reflected by Business Objects had it remained a
    standalone entity but are not permitted to be reflected as
    revenue under U.S. GAAP as a result of fair value
    accounting for Business Objects support contracts in effect at
    the time of our acquisition of Business Objects.
    In contrast to our U.S. GAAP income figures presented in
    our Consolidated Statements of Income, the income measures in
    our management reporting system include the full amount of
    Business Objects support revenue and exclude acquisition-related
    charges. Acquisition-related charges in this context comprise:  
    Amortization expense of intangibles acquired in business
    combinations and standalone acquisitions of intellectual
    property.
    Expenses from purchased in-process research and development.
    Restructuring expenses incurred in connection with business
    combinations. F-85




---



##### Table of Contents



Segment
    Revenue and Results
  
 F-86




---



##### Table of Contents



Reconciliation
    of Revenues and Segment Results
  
  Segment Revenues
      Segment Result
     F-87




---



##### Table of Contents



Segment Assets
    Geographic
    Information
    Total
    Revenue by Location
  
     F-88




---



##### Table of Contents



Software
    and Software-Related Service Revenue by Location
  
      Property,
    Plant, and Equipment and Intangible Assets
  
     F-89




---



##### Table of Contents



(29)
    BOARD OF DIRECTORS  EXECUTIVE BOARD
  
  F-90




---



##### Table of Contents



F-91




---



##### Table of Contents



F-92




---



##### Table of Contents



12-month
   F-93




---



##### Table of Contents



Form 20-F
  (30)
    RELATED PARTY
    TRANSACTIONS          (31)
    PRINCIPAL ACCOUNTANT
    FEES AND SERVICES    Fees for Audit and
    other Professional Services
  
   F-94




---



##### Table of Contents



(32)
    SUBSEQUENT EVENTS   F-95